1997 (8) TMI 157 - AT - Central Excise

Issues Involved:
1. Time-bar of the demand raised in the show cause notice.
2. Eligibility for concessional rate of duty under Notification No. 42/75.
3. Provisional assessment status and its finalization.

Issue-wise Detailed Analysis:

1. Time-bar of the demand raised in the show cause notice:
The appellants contended that the demand was barred by limitation under Section 11A since the show cause notice was issued on 4-5-1982 for the period 1-3-1975 to 14-7-1975. The Department argued that the relevant Rule during the period of demand was Rule 10 of the Central Excise Rules, which had a limitation period expiring on 14-7-1976. The Tribunal found merit in the appellants' contention, noting that the demand could only be raised within one year according to Rule 10 read with Rule 173J as it stood at the relevant time. Thus, no duty could be raised after 14-7-1976, and the longer period available after the amendment of Rule 10 w.e.f. 6-8-1977 was not applicable retrospectively.

2. Eligibility for concessional rate of duty under Notification No. 42/75:
The appellants argued that they were eligible for the concessional rate of duty under Notification No. 42/75, which was not restricted to primary manufacturers alone. The Department contended that the notification applied only to primary producers as defined in the Aluminium (Control) Order, 1970. The Tribunal observed that the appellants were covered within the definition of 'manufacturers' under Para 2(d) of the Aluminium (Control) Order, 1970, and that the notification clearly mentioned 'manufacturers'. The Tribunal found that the appellants had been allotted aluminium of E.C. grade by DGTD for manufacturing conductors for transmission lines to be supplied to various State Electricity Boards, satisfying all conditions of Notification No. 42/75. Therefore, the lower authorities' finding that the notification applied only to 'producers' of primary aluminium was incorrect.

3. Provisional assessment status and its finalization:
The appellants contended that the provisional assessment had come to an end on 22-9-1972 with the Superintendent's specific direction for effecting clearance after payment of duty. The Department argued that the provisional assessment continued. The Tribunal found that the provisional assessment requested by the appellants and allowed by the Superintendent on 12-6-1972 had become final on 1-4-1972 with the Superintendent's demand for duty. The Tribunal also noted that no provisional assessment could continue after the Appellate Collector's order dated 27-9-1972 rejecting the request for provisional assessment. The Tribunal concluded that the assessment was not provisional after these dates.

Conclusion:
The Tribunal held that the appellants were eligible for the concession under Notification No. 42/75 both before and after its amendment by Notification No. 111/75 and were thereby entitled to consequential benefits under law. The appeal was allowed, and the impugned order was set aside.

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