2001 (8) TMI 399 - AT - Central Excise

Summary

Issues:
1. Classification of Voltage Stabilisers under small-scale exemption Notification.
2. Justification for invoking a longer period of limitation for duty demand.

Analysis:
1. Classification of Voltage Stabilisers:
The appellants, engaged in manufacturing Voltage Stabilisers, claimed small-scale exemption benefit under Notification Nos. 175/86 and 1/93. The dispute arose when a show cause notice was issued, alleging that Voltage Stabilisers were parts of air-conditioners and refrigerators, thus ineligible for the exemption. The appellants argued that their product could be used independently and were not solely parts of air-conditioners or refrigerators. They contended that stabilizers regulate input-current for various electrically operated machines, falling under Chapter 90, and should not be classified as accessories of air-conditioning appliances. The Commissioner, however, relying on irrelevant precedents, upheld the duty demand. Notably, in a similar case, another unit's demand was dropped due to a settled audit objection. The Tribunal concurred with the appellants, citing the Delhi Commissionerate's Order and lack of justification to deny the exemption.

2. Limitation for Duty Demand:
The appellants challenged the invocation of a longer limitation period for the duty demand, arguing that all facts were known to the Department, and the exemption was availed with proper approval. The show cause notice was issued in 1994 for the period from 1989 to 1993, during which the Classification Lists were approved by the proper officer. The Tribunal agreed that there was no legal basis to extend the limitation period, ultimately allowing the appeal both on merits and limitation grounds.

In conclusion, the Tribunal ruled in favor of the appellants, determining that Voltage Stabilisers were not parts of air-conditioners or refrigerators, thus qualifying for the small-scale exemption. Additionally, the demand for duty was deemed barred by limitation, leading to the allowance of the appeal on both substantive and procedural grounds.