2008 (10) TMI 432 - AT - Central Excise

Summary

Issues involved: Refund claim under Notification No. 10/96-C.E., eligibility for exemption, finalization of assessment, denial of exemption by the Department, Commissioner's Order dated 5-8-03, appeal against Commissioner's Order, entitlement to exemption under Notification No. 10/96.

Refund Claim and Eligibility for Exemption: The Appellants filed a Refund Application seeking exemption for waste paper used in making pulp under Notification No. 10/96-C.E. The Department denied the exemption stating lack of proof that waste paper was not used for non-cellulosic pulp. Appellants argued they were making pulp other than fibrous cellulosic materials and should be given a chance to demonstrate this. They contended the matter required factual verification from their factory records.

Commissioner's Order and Appeal: The Commissioner's Order dated 5-8-03, based on a penalty show cause notice, did not address the Refund Claim under Notification No. 10/96. The Appellants had not appealed against this Order, as it did not pertain to the pending Refund Claim. The Department argued the Appellants were not eligible for the exemption based on the Commissioner's findings.

Exemption under Notification No. 10/96: The Tribunal found that the Appellants, using waste paper for pulp production, were entitled to the unconditional exemption under Notification No. 10/96 as they were not producing non-cellulosic pulp. The Commissioner's passing remark on their eligibility without proper notice was deemed irrelevant. The matter was remanded to the Original Authority for a fresh Order after considering all evidence and giving the Appellants a fair hearing.

Conclusion: The Tribunal allowed the appeal by remanding the case to the Original Authority for a detailed examination of the Appellants' eligibility for exemption under Notification No. 10/96-C.E., emphasizing the importance of factual verification and fair consideration of all evidence.