Factory-use exemption and finality of assessment bar reopening of the same duty demand and penalty.

Hard coke used within the same factory to produce coke oven gas and then fertilizers fell within the exemption scheme under Notifications No. 58/75 and 77/75, which covered goods manufactured in the factory and used in producing specified exempt goods. Where the Assistant Collector had already examined the demand on that basis and passed orders, the same duty demand could not be validly reopened through a fresh proceeding by the Additional Collector. The Additional Collector's order was therefore not legally sustainable, and the demand and penalty were set aside in favour of the assessee.

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Issues: Whether the Additional Collector was competent to reopen a demand for duty on hard coke after the matter had already been disposed of by the Assistant Collector.

Analysis: The hard coke was used in the manufacture of coke oven gas and, in turn, fertilizers in the same factory. Notification No. 58/75 dated 1-3-75 exempted goods manufactured in the factory and used for producing goods falling under Tariff Item 68, and Notification No. 77/75 dated 6-3-75 widened the exemption to similar goods whether or not they were used in the manufacture of Item 68 goods. The Assistant Collector had already considered the demand on that basis and had passed orders accordingly. In that situation, the same demand could not validly be reopened by the Additional Collector through a fresh demand.

Conclusion: The Additional Collector's order was not legally sustainable and the demand and penalty were set aside in favour of the assessee.

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