1992 (3) TMI 214 - AT - Central Excise

Summary

Issues:
1. Whether the demand of duty to the tune of Rs. 1,20,578/- was sustainable.
2. Whether subsequent issuance of Show Cause Notice cured the original defects.
3. Whether the demand of duty was barred by limitation.

Analysis:
1. The appeal was filed by M/s. Balrampur Chini Mills against an order passed by the Collector of Central Excise (Appeals), Allahabad, regarding a demand of duty amounting to Rs. 1,20,578. The issue revolved around the sustainability of this demand, which was raised on a DD-2 form for excess production in the years 1973-74 and 1974-75. The appellant argued that the demand was not sustainable due to the absence of Show Cause Notices and the delayed issuance of the DD-2 form in May 1977. The Assistant Collector confirmed the demand without issuing Show Cause Notices, leading to the appeal. The appellant contended that the demand was hit by limitation, citing relevant legal decisions to support their argument.

2. The Tribunal considered the facts and circumstances of the case, noting that no Show Cause Notices were issued initially, and a Show Cause Notice was issued by the Assistant Collector only in July 1983, after the matter was remanded by the Collector (Appeals). The Tribunal held that the subsequent issuance of the Show Cause Notice did not cure the original defects. The rebate of excess production incentive was considered a refund of duty, and the demand for recovery should have been issued within the statutory period under the erstwhile Rule 10. Citing a previous decision, the Tribunal concluded that the Show Cause Notice issued in July 1983 was barred by limitation, as it was not issued within the prescribed period.

3. The Tribunal referred to a specific case where the nature of rebate was equated to a refund of duty, emphasizing that rebate is essentially a refund of duty. Based on this understanding, the Tribunal upheld the decision that the demand of duty in the present case was indeed barred by limitation. Consequently, the Tribunal ruled that the demands were hit by limitation, and there was no need to delve into the further merits of the case. As a result, the appeal was allowed in favor of the appellants, granting them consequential relief due to the demands being time-barred.