Limitation and tariff classification for battery grade sulphuric acid failed where the department had sufficient knowledge and no true purification was shown.

Demands under Rule 10A were held time-barred where the department already had sufficient knowledge of the goods' nature from gate passes and prior intimations, so there was no real concealment to justify bypassing ordinary limitation under Rule 10. Battery grade sulphuric acid was also treated as not shown to be a purified acid for tariff purposes, because the notification did not prescribe an absolute purity test and the evidence indicated only reduced iron contamination for battery use. On both limitation and classification, the demands were unsustainable and refund relief followed.

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Issues: (i) whether the demands raised under Rule 10A of the Central Excise Rules were barred by time in the circumstances of the case; (ii) whether battery grade sulphuric acid was a purified acid outside the tariff value fixed for unpurified sulphuric acid under Notification No. 173/70-Central Excise dated 28-11-1970.

Issue (i): Whether the demands raised under Rule 10A of the Central Excise Rules were barred by time in the circumstances of the case.

Analysis: The central question was whether the department had sufficient knowledge of the nature of the goods and could validly avoid the ordinary limitation under Rule 10 by invoking Rule 10A. The record showed that the assessee had described the goods as battery grade acid in gate passes and had also intimated that it would manufacture iron-free sulphuric acid. The material available to the assessing officers was enough to indicate that the product contained less iron than commercial grade acid. The resort to Rule 10A was therefore not justified on the footing of any real concealment or want of information.

Conclusion: The demands were time-barred and the assessee succeeded on this issue.

Issue (ii): Whether battery grade sulphuric acid was a purified acid outside the tariff value fixed for unpurified sulphuric acid under Notification No. 173/70-Central Excise dated 28-11-1970.

Analysis: The notification did not define the degree or nature of purification required, and the evidence showed that absolute purity was not the relevant test. The process of manufacture indicated that the battery grade acid was not shown to be the result of a purification process freeing an unpurified acid from impurities; rather, it was produced in a manner that reduced iron contamination and made it suitable for storage batteries. On that footing, the view that the product was necessarily a purified acid attracting assessment outside the tariff value was not accepted.

Conclusion: The assessee succeeded on this issue as well.

Final Conclusion: The demands were unsustainable both on limitation and on the merits of classification, and the appeals were allowed with consequential refund relief.

Ratio Decidendi: Where the department already has sufficient knowledge of the nature of the goods, it cannot invoke the extended recovery provision in place of the ordinary limitation merely because the demand is otherwise time-barred; and the mere suitability of a product for a particular use does not by itself establish that it is a purified commodity for tariff purposes.

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