1998 (8) TMI 353 - AT - Central Excise

Summary

Issues:
1. Denial of benefit of Notification 175/86-C.E. to the appellants for clearance from the second unit at Najaf Garh.
2. Demand of duty amounting to Rs. 4,50,000 for the period when the unit at Najaf Garh was not registered.

Analysis:
1. The case involved the denial of the benefit of Notification 175/86-C.E. to the appellants for clearance from their second unit at Najaf Garh. The appellants had applied for registration of the second unit, but it was not officially incorporated until a later date. A show cause notice was issued by the Central Excise Department regarding the non-registration of the unit during a specific period. The Assistant Collector initially denied the benefit of the notification. However, on appeal to the lower appellate authority, the appellants succeeded in obtaining approval for the classification list and the benefit of the notification. As no appeal was filed by the Revenue against this order, it became final.

2. Another show cause notice was issued to the appellants for demanding duty of Rs. 4,50,000 for the period when the unit at Najaf Garh was not registered. The Assistant Collector, based on a previous order, had held that the benefit of the notification would not be available for this period. The Additional Collector, adjudicating the second show cause notice, confirmed the duty amount. The appellants challenged this decision, arguing that the impugned order was unsustainable as the lower appellate authority's decision in their favor had become final, extending the benefit of the notification to them. The appellants contended that the demand based on not extending the notification was not valid after the Order-in-Appeal became final.

In the judgment, the Tribunal agreed with the appellants' submissions. It noted that the Additional Collector had not considered the Order-in-Appeal passed by the Collector (Appeals) in favor of the appellants. Since the benefit of Notification 175/86-C.E. had been allowed by the Collector (Appeals) and had become final, any demand based on the non-extension of this notification was deemed unsustainable. Consequently, the impugned order denying the benefit of the notification and confirming the duty amount was set aside, and the appeal of the appellants was allowed with consequential relief.