1997 (3) TMI 280 - AT - Central Excise

Summary

Issues:
- Demand of duty held as barred by limitation
- Allegation of suppression against the respondents
- Denial of benefit of Notification 223/86
- Validity of show cause notice for demanding duty
- Interpretation of Notification 65/87 and its applicability

Analysis:

The judgment dealt with various issues, including the demand of duty being held as barred by limitation. The case involved the manufacturing of HDPE Bags by the appellants without the use of power. The respondents initially paid duty but later claimed the benefit of Notification 65/87, exempting goods manufactured without power from duty. The Department alleged suppression by the respondents for not paying duty after denial of the benefit of Notification 223/86. The Collector dropped the proceedings, citing no suppression by the appellants and the demands being time-barred.

The Department argued that the respondents should have paid duty after denial of the benefit of Notification 223/86 and alleged suppression. The grounds of appeal included questioning the Collector's decision to drop the proceedings and the invocation of Rule 9(2) for duty demand. Reference was made to a Bombay High Court judgment regarding duty assessment under Section 11A.

The respondents contended that they acted in accordance with the approvals received for the benefit of Notification 65/87 and had not suppressed any facts. They claimed that the Department was aware of their clearances through RT 12 Returns. The judgment highlighted the approval granted to the appellants for duty exemption and dismissed the Department's suppression allegations.

The Tribunal found no intention to evade duty by the respondents and upheld the lower authorities' decision. It clarified that the pending matter regarding Notification 223/86 would not be affected by the current judgment. The appeal of the revenue was dismissed, emphasizing that the separate proceedings would be decided on their own merits. The judgment focused on the interpretation of the notifications and the Department's failure to establish suppression of facts by the respondents.