1994 (10) TMI 164

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..... al product S.O. Dyes. Cuprous Chloride is classified under T.I. 68 and when it is used in the manufacture of final product set-off is available in respect of duty paid thereof. However, the department objected to their eligibility for set-off on the ground that it is neither a raw material or a component. It is only catalyst. Though on merits, the issue may fall within the purview of Special Bench, Shri Prakash Shah, the Ld. Advocate pleads that he is not contesting the appeal on merits. They are not contesting the appeal on merits mainly considering the amount involved. However, they are contesting the appeal only on the ground of time bar of the demand. He pleaded that the demand relates to the credit taken and utilised in the month of De .....

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..... ecause the Tribunal has held that the credit held to be wrongly taken cannot be construed to be short levy and the Assistant Collector has no authority to demand the same. 5. After hearing both the sides, I find that the facts are not disputed. The only point of law required to be considered is whether the demand issued for wrong availment of input relief extended under Notification No. 201/79 is subject to the provisions of Section 11A of the Act or the demand could be issued under the provisions of Notification No. 201/79 itsself. This Bench has been consistently following the principle that in such cases demand under Section 11A is called for. This is the view taken by the Special Bench in the case reported in 1989 (42) E.L.T 386 in th .....

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..... and. Hence if they have allowed this as an input by erroneous construction of law, that can be rectified only by issuing a demand notice under Section 11A within the period permissible under the Section 11A. Here the Assistant Collector himself is satisfied that there is no mala fide on the part of the appellants. Hence the question of invoking the extended period does not arise. The Collector (Appeals) observation that the notification itself provides for recovery cannot be sustained because this demand is found to be arising out of non-eligibility for set-off in respect of the inputs, which has resulted in short levy. Hence it directly comes under the purview of Section 11A. I also find that the judgment of the Bombay High Court in Swan .....

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