Appellant wins excise duty case due to time-barred demand and lack of evidence.

The Appellant was found to have cleared yarn without paying excise duty. The exemption under Notification No. 332/77-C.E. did not apply to blended polypropylene yarn. The show-cause notice issued was deemed time-barred under Rule 10, as no suppression of facts was proven. The demand was considered time-barred as the Department failed to establish suppression. The Tribunal held that the demand was time-barred due to no evidence of suppression or misstatement by the Appellant, allowing the appeal.

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Issues:
1. Barred by limitation - Show cause notice period
2. Effect of Rule 10 omission on notice
3. Exemption under Notification No. 332 of 1977

Analysis:
1. The Appellant was found to have cleared yarn without paying excise duty between 6-11-1978 and 31-1-1979. The Assistant Collector held that the exemption under Notification No. 332/77-C.E. did not apply to blended polypropylene yarn, only to yarn spun exclusively from polypropylene. The Appellate Collector upheld this decision, citing subsequent Notification No. 149/80-C.E. exempting blended polypropylene yarn. The Appellate Tribunal observed that the earlier notification applied only to yarn made from polypropylene staple fiber, strengthening the Assistant Collector's finding.

2. The Appellant argued that the show-cause notice issued on 14-9-1979 was time-barred as the normal period for such notice was six months under Rule 10. They also contended that the omission of Rule 10 by Notification No. 177-C.E. made the notice infructuous. The Tribunal examined the notice and found no evidence of suppression of facts or misstatement justifying the extension of the time-limit to 5 years. As the Department failed to establish any suppression, the Tribunal agreed with the Appellant that only the normal time limit applied, rendering the demand time-barred.

3. The Tribunal reviewed the classification lists approved by the Assistant Collector, which clearly stated the composition of the yarn. They found no evidence of suppression or misstatement by the Appellant. Consequently, the Tribunal held that the demand was time-barred, allowing the appeal on this ground and rendering further examination of issues (ii) and (iii) unnecessary.

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