1997 (12) TMI 320 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand by the Commissioner of Central Excise.
2. Stay application for dispensing with pre-deposit of duty and penalty.
3. Interpretation of Notification No. 217/86-C.E.
4. Demand raised for a period beyond 6 months.
5. Allegations of suppression of facts by the Department.

Analysis:

1. The Commissioner of Central Excise confirmed a demand against the party for the removal of finished caustic soda. The party argued that caustic soda was captively used in the purification of brine solution, exempting them from duty payment under Notification No. 217/86. The party claimed caustic soda was both an input and final product, supported by a declaration and Chemical Technology outlines.

2. The party filed a stay application to waive pre-deposit of duty and penalty. The advocate argued that caustic soda's use in brine purification, as per Notification No. 9/69, supported their case. The Department opposed, stating caustic soda for brine purification cannot be used in the production of other excisable or non-excisable products, and it does not increase the final product quantity.

3. The Tribunal examined the notifications and technical literature, finding merit in the party's argument. They noted caustic soda's use in brine purification for caustic soda manufacture. Consequently, the Tribunal waived the pre-deposit of duty and penalty, ruling in favor of the party.

4. The party contended that the demand was raised beyond 6 months but had declared caustic soda usage for caustic soda manufacture, invoking Notification No. 217/86. They argued against any suppression of facts, stating the extension was unwarranted.

5. The Department alleged suppression of facts, emphasizing the party's clearance of caustic soda as finished products for caustic soda manufacture. They claimed the lower authorities rightly held against the party on merits and limitation, urging the deposit of the entire duty and penalty amount.