1999 (8) TMI 516 - AT - Central Excise

Issues Involved:
1. Eligibility for exemption under Notification 105/80 dated 19-6-1980 and Notification 77/83 dated 1-3-1983.
2. Inclusion of various items in the value of plant and machinery.
3. Consideration of Chartered Accountant's certificates.
4. Limitation period for raising demands.

Issue-wise Detailed Analysis:

1. Eligibility for Exemption under Notification 105/80 and Notification 77/83:
The primary issue was whether the appellants were eligible for exemption under the specified notifications, which depended on the value of plant and machinery installed in the factory. The appellants argued that the value of their plant and machinery was below the threshold limits set by the notifications (Rs. 10,00,000 for Notification 105/80 and Rs. 20,00,000 for Notification 77/83). The adjudicating authorities used the value shown in the Balance Sheet to determine eligibility, including various items such as jigs, moulds, dies, inspection gauges, electrical installations, and generator, which the appellants contended should be excluded.

2. Inclusion of Various Items in the Value of Plant and Machinery:
The appellants argued that the adjudicating authorities should have referred to the Fixed Assets Register, which detailed the expenditure on each asset separately. They claimed that items like jigs, moulds, and inspection equipment should not be included in the value of plant and machinery as per the instructions from the Central Board of Excise & Customs (C.B.E.C.). The Principal Collector rejected the Chartered Accountant's certificates without providing specific reasons, while the Additional Collector, in a separate appeal, acknowledged that certain items should be excluded from the value of plant and machinery.

3. Consideration of Chartered Accountant's Certificates:
The Chartered Accountant's certificates were submitted to indicate the actual value of plant and machinery. However, these certificates were disregarded by the adjudicating authorities without any evidence in rebuttal. The Tribunal noted that there should have been a finding regarding the Fixed Assets Register to determine whether the investment on plant and machinery exceeded the cutoff point or included items that should be excluded as per C.B.E.C. instructions.

4. Limitation Period for Raising Demands:
The appellants contended that the demands were time-barred. They argued that the Balance Sheets were regularly filed and examined by the Department, and refund claims were sanctioned after verification. In the case of Appeal No. E/2078/89-B1, it was noted that an earlier show cause notice was not considered in deciding the question of limitation. The Tribunal found that the demands were raised beyond the normal period of six months and were therefore barred by limitation. The Tribunal emphasized that the classification lists claiming exemption were regularly filed and approved by the competent authorities, and the Department could not allege suppression of facts to invoke the extended period of limitation.

Separate Judgments Delivered:
One member of the Tribunal proposed remanding the matter for a de novo decision, emphasizing the need to verify the Fixed Assets Register and consider all pleas. However, another member dissented, arguing that the appeals should be allowed both on merits and on the grounds of limitation, as the demands were time-barred and the value of plant and machinery, excluding certain items, was within the limits prescribed by the notifications.

Majority View and Final Order:
The majority view held that the demands were time-barred and should be set aside. Consequently, the appeals were allowed, and the demands in both cases were set aside on the grounds of limitation.

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