1989 (12) TMI 214 - AT - Central Excise

Summary

Issues:
1. Interpretation of Central Excise Notification 80/80-C.E. regarding duty-free clearances for patent or proprietary medicines and goods not elsewhere specified.
2. Consideration of whether goods falling under Item 68 CET are excisable goods.
3. Application of Explanation V to Notification 80/80-C.E. in excluding certain goods from the aggregate value of clearances.
4. Determination of whether exempted goods are still considered excisable goods.
5. Assessment of the limitation period for issuing a demand notice beyond six months.

Detailed Analysis:
1. The case involved the interpretation of Central Excise Notification 80/80-C.E. concerning duty-free clearances for patent or proprietary medicines and goods not elsewhere specified. The notification exempted certain goods for home consumption up to a specified value but excluded manufacturers exceeding a certain limit of clearances. The appellants were served with a demand notice for exceeding the clearance limit, leading to a penalty imposed by the Assistant Collector, which was upheld by the Collector (Appeals).

2. The Counsel argued that goods falling under Item 68 CET were non-excisable goods based on Notification 55/75-C.E., creating a separate schedule for exemption. However, the Tribunal rejected this argument, stating that Item 68, although a residuary item, constituted excisable goods as per the Central Excises and Salt Act's definition. The contention lacked legal basis and was dismissed.

3. Another argument raised was the application of Explanation V to Notification 80/80-C.E., suggesting that certain goods should be excluded from the aggregate value of clearances. The Tribunal clarified that goods falling under Item 68 were not specified in the notification and, therefore, could not be excluded from the computation of clearances, as they were excisable goods subject to duty.

4. The Counsel further contended that exempted goods should not be considered excisable goods. However, referencing previous judgments, the Tribunal affirmed that goods fully exempt from duty remained excisable goods under the law, emphasizing that exemption did not alter their classification as excisable goods.

5. Regarding the limitation period for issuing a demand notice, the Tribunal analyzed the facts presented by the appellants, indicating that there was no suppression of facts on their part. The Tribunal concluded that the demand for the period beyond six months from the date of the notice was time-barred, as the authorities were aware of the goods manufactured by the appellants, and there was no justification for invoking the extended limitation period.

In conclusion, the Tribunal modified the order-in-appeal, allowing the appeal to the extent that the demand would be only for six months, based on the detailed analysis of the issues raised and the legal interpretations provided.