1997 (7) TMI 440 - AT - Central Excise

Summary

Issues:
1. Consideration of additional evidence in the form of certificates for disputed goods.
2. Waiver of pre-deposit for demanded duty and penalty.
3. Question of limitation regarding duty demand.
4. Financial condition of the appellants.
5. Classification of disputed products as waste and scrap or semi-finished goods.
6. Admissibility of evidence in the Miscellaneous Application.

Analysis:

1. The appellant sought to introduce certificates from dealers as additional evidence for goods sold, "mis-rolls" and "end-cuttings." The certificates indicated the use of these goods by re-rollers and traders, supporting their claim for exemption under Notification 202/88. The evidence was not before the adjudicating authority initially but was now presented.

2. The appellant requested a waiver of pre-deposit for the demanded duty and penalty. They argued that the disputed products fell under Tariff Items No. 7207.90 and 7214.90 and were covered by Notification 202/88. The Department considered the goods as "waste and scrap," but the appellant contended they were usable as semi-finished goods or bars and rods, thus eligible for the exemption.

3. Regarding the limitation issue, the appellant claimed that non-declaration and non-compliance post-Notification 202/88 should not be considered suppression of facts. They argued that the demand for duty beyond a certain period was time-barred, as the show cause notice was issued after the normal limitation period.

4. The appellants' poor financial condition was highlighted, with two units closed and one operational due to a court order. The financial constraints were cited as a reason for the inability to make the pre-deposit as demanded.

5. The classification of "mis-rolls" and "end-cuttings" as waste and scrap or semi-finished goods was disputed. The definition of waste and scrap under the tariff was crucial, and the evidence presented by both sides needed examination to determine the correct classification. The Tribunal found discrepancies in the definitions pre and post 1-3-1988, necessitating a factual assessment.

6. The admissibility of evidence in the Miscellaneous Application was contested. The Department opposed the inclusion of new evidence at that stage. However, the Tribunal allowed the Stay Petition and directed a fresh adjudication by the adjudicating authority considering all evidence, including that from the appellants.

In conclusion, the Tribunal allowed the Stay Petition unconditionally, remanding the matter for a fresh adjudication based on all evidence and in accordance with the principles of natural justice. The issues of limitation and Modvat credit were to be considered in the new proceedings. The appeal was disposed of with these directions.