1991 (2) TMI 304 - AT - Central Excise

Summary

Issues:
1. Whether 'vulcanised micro cellular rubber sheet' used in the manufacture of footwears are entitled for exemption under specific notifications.
2. Whether the demand for duty is time-barred.

Analysis:
1. The dispute revolves around the interpretation of Notification No. 71/68 granting exemption to rubber products. The Collector contended that the notification exempts goods under Tariff Heading 40.05, not 40.08, and cited a drafting defect in the notification. The appellants argued that the disputed product falls within the notification's description and is eligible for exemption, regardless of falling under Tariff Item 40.08. They relied on a Supreme Court judgment emphasizing clear intention in interpreting notifications and criticized the Collector for rejecting their claim.

2. The Notification No. 71/68 was successively amended by Notifications No. 78/86 and 246/86, specifying changes from 'Chapter 40' to 'Heading No. 40.05'. The Tribunal concurred with the appellants, asserting that the amendments intended to exempt goods under Tariff Item 40.05 and 'all rubber products' falling under specified criteria. Any other interpretation would amount to amending the notification, beyond the Tribunal's scope. Therefore, the vulcanised rubber sheets are entitled to exemption under the amended notifications.

3. Regarding the time bar issue, the Collector found the appellants in violation of maintaining statutory records and clearing goods without duty payment, invoking the proviso to Section 11A. However, since the goods are deemed eligible for exemption, the liability for duty payment does not arise, negating the question of suppression of facts. Consequently, the Tribunal allowed the appeal in favor of the appellants, upholding their entitlement to exemption under the notifications.