1997 (7) TMI 416 - AT - Central Excise

Summary

Issues:
1. Applicability of duty on captive consumption of yarn in the manufacturing of fabrics.
2. Time bar and legality of demand for duty on yarn consumed in the manufacturing process.
3. Validity of show cause notice and compliance with legal requirements.
4. Dispute regarding the actual date of service of the show cause notice.
5. Interpretation of Section 11A of the Central Excise Act in relation to the time bar.

Analysis:

1. The appellant, a composite mill, challenged the duty demands imposed on the captive consumption of yarn in the manufacturing of fabrics. The duty was levied under the Central Excises and Salt Act, 1944, based on the provisions of Rules 9 and 49. The appellant contended that the duty imposition was consistent with the law, as they had been paying duty on both yarn and fabrics from the inception of their operations.

2. The dispute arose from demands raised by the Assistant Commissioner, which the appellant contested before the Collector. The appellant argued that the show cause notice issued in 1983 was time-barred and violated principles of natural justice. The Collector remanded the case for fresh adjudication, leading to the current appeal. The appellant relied on previous decisions and legal precedents to support their claim that demands beyond a certain period were not recoverable.

3. The central issue revolved around the validity of the show cause notice dated 9-2-1983 and the subsequent service of the notice. The appellant argued that the notice was not served within the prescribed time frame, rendering the demand time-barred. The appellant emphasized the importance of actual service of the notice as per Section 11A of the Central Excise Act.

4. The Departmental Representative countered the appellant's arguments by asserting that the notice was served in a timely manner, as per the standard practices of the local range office. The dispute centered on the date of service of the notice and the lack of specific evidence regarding the same. The Department maintained that the appeal lacked clarity and specificity in challenging the service of the notice.

5. The Tribunal analyzed the provisions of Section 11A of the Central Excise Act to determine the legality of the demand and the time bar issue. The Tribunal concluded that the show cause notice was issued in compliance with legal requirements, but the time bar argument raised by the appellant was not upheld. The decision was based on the interpretation of relevant legal provisions and previous judicial orders, leading to the rejection of the appeal.

In conclusion, the Tribunal upheld the duty demands on captive consumption of yarn in the manufacturing process, ruling against the appellant's claims of time bar and procedural irregularities in the issuance of the show cause notice. The judgment emphasized the importance of legal compliance and adherence to statutory provisions in excise duty matters.