TIRUPATI UDYOG LTD., BHARAT Vs. CCE

JUDGEMENT

(1.) In these six appeals, the common issue involved is whether extended period of limitation for demanding duty under Section 11A (1) of the Central Excise Act is invocable. Shri R. Santhanam, learned Advocate, submitted that all the appellants are engaged in the manufacture of aluminium utensils; that they purchase aluminium scrap from the market which is converted into ingots after melting the same, thereafter, the aluminium sheets are made out of ingots, out of which circles are cut which are captively used in the manufacture of utensils; that the appellants, under the bona fide belief, that circles being intermediate goods, were not liable to duty, did not discharge the duty liability. The learned Advocate very fairly mentioned that the Appellate Tribunal, in the case of Ganga Aluminium Industries and Ors. v. CCE, Patna, has confirmed the duty liability on aluminium circles vide Final Order Nos. A/129 -135/Kol./03 dated 19.2.03; that the learned Advocate has also brought to our attention another Tribunal's decision in the case of J.P. Metal Industries and Ors., (Final Order Nos. A/1898 -1905/Cal. 2000 dated 23.11.2000) wherein the Tribunal has held that aluminium circles are liable to excess duty.

(2.) The learned Advocate, however, contended that in all the show cause notices issued to the appellants, demand has been confirmed for extended period of limitation by invoking the larger period; that the larger period for demanding Central Excise duty is not invocable as there was no wilful mis -statement of facts or suppression on the part of any of the appellants; that they were, under the bona fide belief, that as the circles are being captively used and these being intermediate products, no duty is payable; that under the erstwhile Central Excise Tariff, the Bombay High Court in the case of Light Metal Works and Ors. v. U.O.I., 1986 (25) ELT 613 (Bom.) has held that aluminium circles, used for the manufacture of tops, are not classifiable under Tariff Item 27(b) of the old Central Excise Tariff; that the Appellate Tribunal also, in the case of . Light Metal Works and Ors. v. CCE, (supra) vide Final Order No. 612/86 -B1 dated 26.9.1986, had held that collection of Central Excise duty on aluminium circles made out of duty -paid aluminium sheets and captively consumed, is not in accordance with law; that the appeal, filed by the Revenue against the said decision, was dismissed by the Supreme Court, as reported in 1997 (95) ELT A -66. He submitted that the Commissioner (Appeals) also has allowed the benefit of Notification No. 67/95 to the manufacturers of aluminium circles and as such the appellants were, under the bona fide belief that no duty is payable by them. Finally, he submitted that for the same reason, no penalty is imposable on any of the appellants.

(3.) Countering the arguments, Shri Kumar Santosh, learned SDR, submitted that the excisability of aluminium circles, has been settled by the Appellate Tribunal in the case of CCE, Patna v. J.P. Metal Industries (supra); that circles are taken out of sheets, a commercially finished product with new name used and character emerges and as such the circles are a manufactured product; that aluminium circles are sold as such in the market and these are movable and marketable products. Regarding invocation of extended period of limitation, the learned SDR contended that the same is invocable as none of the appellants had ever informed the Central Excise authorities about the manufacture of their product; that the Appellate Tribunal in the case of Orissa Bridge and Construction Corp. Ltd. v. CCE, Bhabneswar, 2002 (146) ELT 84 (T) has held that if the appellants had not taken any licence or informed the Central Excise authorities about the manufacture of the goods in question and the appellants' activity was detected by the Revenue when their factory was visited by the officers, the longer period of limitation has been rightly invoked by the Department. The learned SDR contended that this decision of the Tribunal is squarely applicable to the facts of the present matters and as such the demands are not hit by time limit. Finally, he mentioned that as the duty has not been discharged on the aluminium circles at the time of their captive consumption, the penalty is imposable on the appellants.