1996 (9) TMI 422 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 182/84 for waste and scrap from imported Aluminium rods.
2. Applicability of the extended limitation period for the demand of duty.
3. Applicability of Section 11D of the Central Excises and Salt Act for amounts collected as duty.

Detailed Analysis:

1. Eligibility for Exemption under Notification No. 182/84:
The appellants, manufacturers of ACSR conductor, AAC Aluminium Alloy Conductors, and Steel wires, used imported Aluminium rods cleared under exemption Notification 116/88-Cus. They claimed exemption for Aluminium waste and scrap under Notification No. 182/84. The department contested this, arguing that the exemption was only for waste and scrap from Aluminium on which duty had been paid, whereas the appellants used duty-free imported rods. The appellants cited several Tribunal decisions and a Patna High Court judgment (Tata Yodogawa Ltd. v. Union of India) supporting their claim that exemption applies even if the raw material was exempt from duty. The department countered that no duty was paid at any stage, making the exemption inapplicable. The Tribunal noted the relevant requirement in Notification 182/84 and the department's stance, but ultimately found that the appellants' belief in their eligibility for exemption was consistent with existing authoritative decisions.

2. Applicability of Extended Limitation Period:
The appellants argued that the show cause notice was barred by limitation, as there was no suppression or wilful mis-statement. They had submitted invoices and RT 12 returns, indicating no evasion. The Tribunal agreed, noting that the appellants had disclosed the use of exempted Aluminium rods and the clearance of resulting waste and scrap under exemption. The notice was issued beyond the normal six-month period, making the demand time-barred. The demand was set aside on the ground of limitation.

3. Applicability of Section 11D of the Central Excises and Salt Act:
The department invoked Section 11D, which requires any amount collected as representing duty to be paid to the Central Government. The appellants contended that Section 11D was not applicable retrospectively and that they had not collected any amount as duty from their customers. The Tribunal noted that the Collector had disputed this claim, citing purchase orders inclusive of duty and referring to specific Gate Passes. However, the Tribunal found that the retrospective applicability of Section 11D was not apparent and that the department could not expect compliance before the section's introduction. Additionally, the documents cited by the Collector were not within the period covered by the show cause notice. Therefore, no order under Section 11D was warranted, and the demand and penalty were set aside.

Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order demanding duty and imposing a penalty. The key findings were that the appellants' claim for exemption was consistent with existing legal interpretations, the demand was time-barred, and Section 11D was not applicable retrospectively.