1989 (2) TMI 299 - AT - Central Excise

Summary

Issues:
1. Whether the exemptions under Notifications 145/71 and 147/74 for inputs used in the manufacture of fertilizers are available when the fertilizers are sold as technical grade urea (urea TG) instead of fertilizer grade urea (urea FG).
2. Whether the time limit for duty recovery under Section 11A applies to the case.

Analysis:

Issue 1:
The main issue in this case is whether the exemptions under Notifications 145/71 and 147/74 apply to inputs used in the manufacture of fertilizers when the fertilizers are sold as urea TG instead of urea FG. The appellant-Collector argued that since the inputs were used for urea TG, duty exemptions do not apply. However, the respondents contended that urea TG and urea FG are essentially the same product, meeting the same specifications, and thus, should not be denied the benefit of the notifications. The Tribunal agreed with the respondents, noting that the products were similar in composition and could be used interchangeably. Therefore, the inputs were rightly used in the manufacture of fertilizers, entitling the respondents to the benefit of the notifications.

Issue 2:
The second issue raised was whether the time limit for duty recovery under Section 11A would apply in this case. The respondents argued that the normal time limit of six months should apply as there was no willful misstatement or suppression of facts. However, the Tribunal did not delve into this issue as it found in favor of the respondents on the applicability of the duty exemptions. Consequently, the Tribunal dismissed the appeals of the appellant-Collector and upheld the impugned orders, granting consequential relief to the respondents.

In conclusion, the Tribunal ruled in favor of the respondents, holding that the exemptions under Notifications 145/71 and 147/74 applied to the inputs used in the manufacture of fertilizers sold as urea TG. As a result, the demands for duty recovery were deemed unsustainable, and the impugned orders were confirmed, providing relief to the respondents.