1998 (6) TMI 295 - AT - Central Excise

Summary

Issues:
1. Concession withdrawal and differential duty demand on Viscose Staple Fibre.
2. Applicability of duty rate at the time of clearance.
3. Reassessment of goods upon concession withdrawal.
4. Interpretation of Circular No. 48/48/94-CX regarding exemption to components of IC engines.
5. End-use condition for concessional rate materials.

Analysis:
1. The appellants faced demands due to the withdrawal of concession on Viscose Staple Fibre, leading to differential duty claims. They argued that duty should be based on the rate prevalent at the time of clearance, citing Supreme Court decisions. The Revenue contended that stock not used for manufacturing became liable to duty at the non-concessional rate.

2. The Tribunal noted that at the time of clearance, the appellants were eligible for concessional assessment under Notification No. 53/87, indicating no error in the initial assessment. There is no legal provision to reassess goods at a non-concessional rate upon withdrawal of the concession, as clarified by Circular No. 48/48/94-CX, emphasizing the duty rate at clearance.

3. Circular No. 48/48/94-CX clarified the end-use condition post-clearance, stating that components received at concessional rates should be used for the intended purpose, even after the withdrawal of the notification. The Tribunal, aligning with Supreme Court precedents, found the impugned orders incorrect and allowed the appeals, granting relief to the appellants based on the legal position clarified in the circular.

4. The Circular highlighted that end-use fulfillment post-clearance is crucial for maintaining exemption benefits, emphasizing the importance of proving materials' usage in manufacturing the intended product. The Tribunal's decision to set aside the impugned orders was based on the legal clarity provided by the Circular and supported by relevant Supreme Court judgments.

5. The Tribunal's analysis focused on the correct application of duty rates at the time of clearance, the absence of provisions for retrospective reassessment upon concession withdrawal, and the significance of end-use conditions for maintaining exemption benefits. The alignment with legal provisions and precedents led to the favorable outcome for the appellants, emphasizing compliance with post-clearance conditions for concessional rate materials.