1997 (7) TMI 424 - AT - Central Excise

Issues Involved:
1. Liability to pay additional Excise Duty on wax.
2. Payment of basic excise duty on slack wax.
3. Limitation period for issuing the show cause notice.
4. Adjustment of duty paid on paraffin wax towards duty on slack wax.
5. Duty on waste/residue of slack wax.
6. Classification and duty on slack wax and paraffin wax.
7. Authority of the Assistant Commissioner to adjudicate the case.
8. Applicable rate of duty under the Central Excise Rules.

Detailed Analysis:

1. Liability to pay additional Excise Duty on wax:
The High Court ruled that the petitioner was not liable to pay additional Excise Duty on wax from November 30, 1972, to December 16, 1977, due to the exemption provided by Notification No. 225/72-Central Excise. The Division Bench upheld this, stating there was no need to interfere with the Single Judge's order as the Department had opportunities to realize the due tax.

2. Payment of basic excise duty on slack wax:
The High Court directed the respondent to ascertain whether the petitioner had paid any basic duty on slack wax at the time of receiving delivery. If such payment was made, no further demand should be made. If not, a fresh demand should be issued. The Tribunal found no evidence that the appellants paid basic duty on slack wax and upheld the demand for duty on the slack wax.

3. Limitation period for issuing the show cause notice:
The Tribunal rejected the appellant's plea that the fresh show cause notice dated 16-5-1989 was barred by limitation. The initial show cause notice was issued within the limitation period on 16-12-1977. The High Court quashed this notice and directed the Department to start proceedings afresh, making the subsequent notice valid.

4. Adjustment of duty paid on paraffin wax towards duty on slack wax:
The appellants argued that the basic duty paid on paraffin wax should be adjusted towards the duty on slack wax. The Tribunal found no merit in this argument, stating that the High Court's order did not mention any such adjustment. The duty demanded was on slack wax, not paraffin wax.

5. Duty on waste/residue of slack wax:
The appellants contended that duty should be restricted to 110 M.T. of paraffin wax, as the rest was waste. The Tribunal dismissed this argument, stating that duty was confirmed on the slack wax, and the request for destruction of residue should be dealt with separately by the Assistant Commissioner.

6. Classification and duty on slack wax and paraffin wax:
The appellants argued that both slack wax and paraffin wax fell under the same tariff heading and should not be taxed twice. The Tribunal found that although classified under the same heading, they are separate excisable commodities and liable for duty independently.

7. Authority of the Assistant Commissioner to adjudicate the case:
The appellants challenged the Assistant Commissioner's authority, citing a circular restricting his adjudication powers to Rs. 50,000. The Tribunal upheld the Commissioner (Appeals)'s reasoning that the circular applied to demands under the Central Excise Act, not Rule 191, and that the Assistant Commissioner acted under High Court directions.

8. Applicable rate of duty under the Central Excise Rules:
The Tribunal agreed with the Commissioner (Appeals) that sub-rule (5) of Rule 9A was applicable, as the appellants were required to pay duty on slack wax obtained under Bond.

Conclusion:
The Tribunal found no merits in the appeal and rejected it, upholding the demand for duty on slack wax and confirming the authority and actions of the Assistant Commissioner.

← Previous Next →