1992 (8) TMI 194 - AT - Central Excise

Summary

Issues:
1. Appeal against the order of Collector of Central Excise, Guntur demanding duty under exemption notification 85/85.
2. Grounds of limitation raised by the appellant.
3. Interpretation of Rule 9(2) read with Section 11A of the Central Excises & Salt Act, 1944.
4. Compliance with trade notice 125/82 regarding small scale exemption notification.
5. Burden on appellants to inform authorities about exceeding the exemption limit.
6. Applicability of law invoked by the lower authority.
7. Correctness of duty demand and penalty imposition.
8. Impact of future contingencies on assessments under the notification.
9. Comparison with the case of Premier Automobiles regarding finality of assessments.

Analysis:

The appeal in this case challenges the order of the Collector of Central Excise, Guntur, demanding duty from the appellants for incorrectly availing exemption under Notification 85/85 dated 17-3-1985. The appellant's main argument revolves around the ground of limitation. The appellant's advocate contended that although the appellant exceeded the clearance limit of Rs. 75 lakhs, they did not suppress any facts from the authorities. The Departmental Representative supported the lower authority's reasoning, asserting that the appellant's actions fell within the scope of Rule 9(2) read with Section 11A of the Central Excises and Salt Act, 1944.

The Tribunal observed that the appellant had initially declared their clearances would not exceed Rs. 75 lakhs when filing the classification list. However, the appellant failed to monitor their clearances and inform the Department promptly upon exceeding the limit, as required by trade notice 125/82. The Tribunal emphasized that when opting for benefits under an exemption notification with specified limits, the onus is on the appellants to disclose the total clearances to the Department. Due to the appellant's failure to comply with these obligations, the Tribunal upheld the correctness of the duty demand and penalty imposition.

Furthermore, the Tribunal discussed the impact of future contingencies on assessments under the notification. Citing the case of Premier Automobiles, where assessments were not considered final due to pending litigation over pricing, the Tribunal concluded that assessments made earlier could not be deemed final when contingent events were yet to occur. Both the Department and the appellant were aware of the future contingency regarding the appellant's clearances exceeding Rs. 75 lakhs, rendering any prior assessments non-conclusive.

In light of the above analysis, the Tribunal dismissed the appeal, affirming the correctness of the duty demand and penalty imposition based on the appellant's failure to fulfill disclosure obligations and the non-finality of assessments under the exemption notification pending future contingencies.