1999 (5) TMI 367 - AT - Central Excise

Summary

Issues Involved:
1. Demand of duty and imposition of penalty and interest.
2. Eligibility for exemption under Notification No. 69/86.
3. Alleged suppression of facts and invocation of the extended period of limitation.

Detailed Analysis:

1. Demand of Duty and Imposition of Penalty and Interest:
The Commissioner of Central Excise, Mumbai-III, confirmed a demand of duty amounting to Rs. 9,10,36,215/- against the appellant, imposed an equal amount of penalty, and levied interest of 20% under Section 11AB of the Central Excise Act on delayed payment of duty for the period covered under the show cause notice. The appellant, a manufacturer of "Enamelled Winding Wires," challenged this decision.

2. Eligibility for Exemption under Notification No. 69/86:
The appellant argued that they were entitled to exemption under Notification No. 69/86, which exempts copper wires from duty if they are made from wire bars/rods/wires of maximum cross-sectional dimension exceeding 6 mm, provided that duty of excise has been paid at a rate of not less than Rs. 6,200/- per M.T. and no Modvat credit was taken. The appellant imported copper wire bars and rods, converted them into wires exceeding 6 mm through job workers, and then drew them into wires not exceeding 6 mm. They claimed exemption on the portion where no Modvat credit was taken and paid duty on the rest. The Tribunal found that the appellant had disclosed the production process and complied with the conditions for exemption, as evidenced by their letters and classification lists.

3. Alleged Suppression of Facts and Invocation of the Extended Period of Limitation:
The department alleged that the appellant suppressed facts by not correctly declaring the nature of production and inputs in the classification lists, thereby justifying the invocation of the extended period of limitation. The Tribunal, however, noted that the appellant had provided full particulars in their classification lists and letters, and the department was aware of the production pattern. The Tribunal cited trade notices and previous judgments to support the appellant's right to claim exemption and avail Modvat credit simultaneously. The Tribunal concluded that there was no suppression of facts by the appellant, and the department's approval of the classification lists precluded the invocation of the extended period of limitation. The Tribunal set aside the impugned order, allowing the appeal with consequential relief.

Conclusion:
The Tribunal allowed the appeal, finding that the appellant was entitled to exemption under Notification No. 69/86, had not suppressed facts, and the department's approval of the classification lists barred the invocation of the extended period of limitation. The demand of duty, penalty, and interest imposed by the Commissioner was set aside.