THE COLLECTOR OF CENTRAL EXCISE Vs. FENOPLAST LTD.

JUDGEMENT

(1.) THESE reference cases are filed by the Central Excise Department under Section 35G(3) of the Central Excise Act, 1944 (for short the Act). The genesis of these cases is a bit complicated.

(2.) THE respondent is a manufacturing unit and it is an assessee of the Central Excise Duty. One of the products manufactured by it is rexin cloth. The excise duty was being levied upon it by treating the rexin cloth as a product falling under Clause 19(iii) of Schedule -I to the Central Excise Tariff Act (for short the Tariff Act). The respondent made a representation to the Assessing Authority on 09.03.1981 with a prayer to treat the rexin cloth as the one under Clause 19(i) of the Schedule -I to the Tariff Act. Alleging that its representation was not being considered, the respondent filed W.P. No. 2199 of 1981 before this Court with a prayer to declare the inaction on the part of the Assessing Authority as arbitrary and for consequential directions. An interim order was passed in the writ petition with a direction to the respondent therein to treat the rexin cloth under Clause 19(i) of the Tariff Act, subject to the condition that the respondent shall furnish bank guarantee to the extent of 30% of the difference of excise duty.

(3.) THE petitioner issued a demand notice, dated 16.11.1994 to the respondent requiring it to pay the difference of the excise duty for the products that were cleared during the pendency of W.P. No. 2199 of 1981, in compliance with the interim orders. The respondent raised an objection as to limitation under Section 11 -A of the Act as it stood at the relevant point of time. That was not accepted by the petitioner and an order of attachment, dated 29.11.1994 was passed for realisation of the arrears of excise duty. The respondent filed Appeal Nos. 308/94(H)(CE) before the Commissioner of Central Excise (Appeals), Hyderabad, challenging the order of attachment, dated 29.11.1994. He has also filed Appeal No. 388/96(H)(CE) challenging the demand notice, dated 16.11.1994. While Appeal No. 308/94(H)(CE) was allowed on 13.01.1994, Appeal No. 388/96(H)(CE) was allowed on 24.09.1996, mainly on the ground that the demand was barred by limitation stipulated under Section 11 -A of the Act, as it stood at the relevant point of time. The Department filed Appeal Nos. E/SB/5264/95 and E/1425/96 before the Central Excise and Gold (Control) Appellate Tribunal, South Zonal Bench, Madras (for short the Tribunal), against the orders passed by the Commissioner.