1998 (5) TMI 165 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 77/85-C.E. regarding capital investment in plant and machinery for exemption eligibility.
2. Determination of capital investment in plant and machinery at multiple factory sites for excise duty calculation.

Analysis:
1. The appellants had invested in plant and machinery exceeding Rs. 20.00 lakhs, leading to a show cause notice questioning their eligibility for Notification No. 77/85-C.E. The adjudicating authority confirmed a duty demand of Rs. 2,46,154.80 on excisable goods cleared during a specific period. The appellant contended that the capital investment included machinery at two locations, 'Lathikata' and Angul, for contract-work with NALCO. The Revenue argued that the industrial unit was only at 'Lathikata,' and no evidence proved machinery installation at Angul.

2. The Tribunal observed that the capital investment in plant and machinery at each industrial unit of a manufacturer must be considered for exemption under Notification No. 77/85. As the total investment at 'Lathikata' and Angul was less than Rs. 20.00 lakhs individually, both units were entitled to the exemption if clearances stayed within the limit. However, lacking data on combined clearances, the Tribunal remanded the matter for determining duty liability, emphasizing that all points, including the time-barred demand, could be raised during re-adjudication.

3. The Tribunal criticized the adjudicating authority for not investigating the appellant's claim of machinery installation at Angul separately. It clarified that for exemption eligibility, capital investment at each industrial unit should be evaluated. The Tribunal's decision favored the appellant, acknowledging their entitlement to exemption if clearances from both units remained within the limit specified in the notification. The case was remanded for a fresh determination of duty liability, allowing all issues to be raised during the process.