1999 (8) TMI 500 - AT - Central Excise

Issues Involved:
1. Eligibility for exemption under Notification 105/80 dated 19-6-1980 and 77/83 dated 1-3-1983.
2. Determination of the value of plant and machinery.
3. Consideration of items to be excluded from the value of plant and machinery.
4. Limitation period for issuing show cause notices.
5. Remand for de novo decision versus allowing appeals on merits and limitation.

Issue-Wise Detailed Analysis:

1. Eligibility for Exemption under Notification 105/80 and 77/83:
The appellants argued that they were eligible for exemption as the value of their plant and machinery was below the thresholds set by the notifications (Rs. 10,00,000 under Notification 105/80 and Rs. 20,00,000 under Notification 77/83). The adjudicating authorities had taken the value shown in the Balance Sheet under the head Plant and Machinery to determine eligibility, which included various items like jigs, moulds, dies, etc.

2. Determination of the Value of Plant and Machinery:
The appellants contended that the adjudicating authorities should have referred to the Fixed Assets Register, which provides a detailed breakdown of expenditures on different assets. The Chartered Accountant's certificate indicating the actual value of Plant and Machinery was disregarded by the authorities without any evidence to rebut it.

3. Consideration of Items to be Excluded from the Value of Plant and Machinery:
The appellants argued that certain items like jigs, moulds, dies, inspection gauges, electrical installations, generator, etc., should not be included in the value of plant and machinery for the purpose of exemption. This argument was supported by instructions from the Central Board of Excise & Customs (C.B.E.C.). The Principal Collector and Additional Collector had conflicting views on whether these items should be excluded.

4. Limitation Period for Issuing Show Cause Notices:
The appellants claimed that the demands were time-barred as the show cause notices were issued beyond the normal period of six months. They argued that the Balance Sheets had been regularly filed and approved by the Department, and refund claims were sanctioned based on these Balance Sheets. The Tribunal noted that the classification lists claiming the benefit of exemption were filed regularly and approved by the competent authorities, making the extended period of limitation inapplicable.

5. Remand for De Novo Decision versus Allowing Appeals on Merits and Limitation:
There was a difference of opinion among the members of the Tribunal. One member proposed remanding the matter for a de novo decision to verify the correct value of Plant and Machinery after considering all pleas and verifying the Fixed Assets Register. Another member proposed allowing the appeals on merits and limitation, arguing that the value of certain items should be excluded and the demands were time-barred.

Separate Judgments Delivered by the Judges:

Majority Opinion:
The majority view held that the demands were time-barred and should be set aside. It was noted that the classification lists were approved by the proper officers, and the refund claims were sanctioned after verifying the capital investment on plant and machinery. Therefore, the Department could not claim suppression of facts by the appellants. The appeals were allowed both on merits and limitation.

Final Order:
In light of the majority view, the demands were held as time-barred and set aside. The appeals were allowed.

Conclusion:
The judgment concluded that the demands against the appellants were time-barred and should be set aside. The appeals were allowed on the grounds of merits and limitation, with the Tribunal finding that the Department had not adequately considered the appellants' arguments regarding the exclusion of certain items from the value of plant and machinery and the regular approval of classification lists and refund claims by the Department.

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