2000 (2) TMI 475 - AT - Central Excise

Summary

Issues:
1. Whether excise duty is leviable on scrap caps.
2. Whether the demands made by the Assistant Commissioner are within the time limit specified in Section 11A(1) of the Central Excise Act.

Issue 1:
The first issue in this case revolves around the question of whether excise duty is leviable on scrap caps. The appellant, M/s. Hind Lamps Ltd., manufactured electric and miniature lamps along with aluminium caps used in the manufacturing process. The appellant contended that the wasted caps, sold for extracting metals, were not dutiable under the Central Excise Tariff. The Assistant Commissioner initially confirmed that no duty was payable on the scrap caps, leading to refund claims being sanctioned to the appellant. However, a subsequent show cause notice alleged that the refunds were erroneously sanctioned based on deliberate misstatements. The Commissioner (Appeals) upheld the demand for excise duty, classifying the scrap caps as a manufactured product under tariff item 68. The appellant argued that the demand was time-barred as the show cause notice was issued after the last refund was sanctioned, and there was no suppression or misstatement on their part. The Tribunal, after considering the submissions, found that the appellant had sought advice from the department regarding the classification of the scrap caps, and the Assistant Commissioner had clarified that the caps were not dutiable. As such, the Tribunal held that there was no suppression or misstatement by the appellant, and the demands were hit by the time limit specified in Section 11A(1) of the Central Excise Act. Therefore, the orders demanding excise duty on scrap caps were set aside, and the appeals were allowed.

Issue 2:
The second issue concerns the demands made by the Assistant Commissioner for excise duty on aluminium and brass scrap/strips. The appellant argued that the demands, confirmed by the Commissioner (Appeals), were beyond the time limit specified in Section 11A(1) of the Central Excise Act. The appellant relied on a tariff advice clarifying the duty liability on such scrap prior to a specific date. They also highlighted correspondence with the department and the Assistant Commissioner's confirmation that no duty was payable on the scrap in question. The appellant referred to precedents where waste and scrap were not considered finished goods for classification under tariff item 68. The Tribunal noted that the demands were issued beyond the 6-month period specified in the Act, and considering the circumstances and clarifications provided by the department, found no suppression or misstatement by the appellant. Therefore, the demands for excise duty on aluminium and brass scrap/strips were also held to be beyond the time limit and were set aside. Consequently, the appeals on these demands were allowed.

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