1998 (6) TMI 285 - AT - Central Excise

Summary

Issues:
1. Availing proforma credit Notification No. 201/79 for paper covered Copper Strip used in the manufacture of Transformers.
2. Barred by time - Show cause notice issued under Section 11A.
3. Interpretation of High Court judgments regarding duty exemption and recovery of proforma credit.
4. Payment made by the supplier under protest.
5. Relevant date for issuing notice and applicability of Section 11A.

Analysis:

1. The appeal concerned the availing of proforma credit under Notification No. 201/79 for paper covered Copper Strip used in Transformer manufacturing. The appellant was asked to pay duty due to a High Court judgment holding the input non-excisable under the erstwhile Central Excise Tariff.

2. The appellant argued that the demand was time-barred under Section 11A, citing a Tribunal decision in Bakeman's Home Products Pvt. Ltd. case. The Tribunal considered the limitation aspect and the provisions of Section 11A in relation to the demand.

3. The appellant also referred to a Bombay High Court judgment in Bharat Bijlee Ltd. case, emphasizing that proforma credit recovery should align with Rule 56A(5) limitations, not Section 11A of the Central Excises and Salt Act, 1944. The Tribunal analyzed these legal interpretations in the context of the present case.

4. The Department contended that the duty was paid under protest by the supplier, and the relevant date for issuing notice was the High Court decision date. The argument was made that the demand was not time-barred based on these considerations.

5. The Tribunal examined the submissions from both sides and reviewed the facts. It noted similarities with the Bakeman's Home Product Pvt. Ltd. case and emphasized that the payment made by the supplier under protest did not alter the situation. The Tribunal ruled that the provisions of Section 11A would apply once the appellant availed proforma credit. Considering the legal precedents and circumstances, the Tribunal accepted the appellant's contentions, allowed the appeal, and granted consequential relief if applicable.