2000 (11) TMI 407 - AT - Central Excise

Summary

Issues:
- Dispensing with the condition of pre-deposit of duty amount
- Applicability of Section 4 provisions on the place of removal
- Bar of limitation for raising the show cause notice

Dispensing with Pre-Deposit of Duty Amount:
The appellant sought dispensation of the pre-deposit of duty amount of Rs. 16,12,512 confirmed against them for the period October 1996 to August 1998, along with a personal penalty. The appellant, engaged in manufacturing Sodium Tripoly Phosphate, argued that the goods cleared for M/s. Hindusthan Lever Ltd. were consumed captively by them, not for further sale. The appellant contended that the transaction was complete at their factory gate, and the provisions of Section 4(4)(b)(iii) extending the place of removal did not apply in their case. The Tribunal found merit in the appellant's case, noting that the goods were not removed for further sale and that the transaction concluded at the factory gate, leading to the allowance of the stay petition without conditions.

Applicability of Section 4 Provisions on Place of Removal:
The dispute revolved around the interpretation of Section 4 provisions concerning the place of removal. The appellant argued that the goods cleared to M/s. Hindusthan Lever Ltd. were not for further sale but for captive consumption, thus the extended definition of 'place of removal' did not apply. The Tribunal analyzed Section 4(1)(a) proviso 1A and Section 4(4)(b)(iii), emphasizing that the transaction's completion at the factory gate precluded the need to adopt the meaning assigned to 'place of removal.' By considering the peculiar facts of the case, the Tribunal concluded that the provisions did not extend to the appellant's situation, supporting the appellant's contentions.

Bar of Limitation for Raising Show Cause Notice:
The appellant contended that the demand was time-barred as the show cause notice was issued beyond the normal six-month period, except for a minor delay. The adjudicating authority had dismissed the plea of limitation without considering all relevant facts. The Tribunal, after hearing both parties, found merit in the appellant's argument regarding limitation, noting that the notice was issued after the prescribed period, except for a minimal delay of five days. Consequently, the Tribunal considered it a fit case to allow the stay petition unconditionally, highlighting the importance of adhering to statutory timelines in such matters.