Limitation, Committee on Disputes clearance, and scrap exemption issues were resolved in favour of Revenue on merits.

The demand was not barred by limitation because the show cause notice was shown to have been issued on 20-6-2003 for the period January 2002 to March 2003, and the contrary finding lacked record support. Absence of Committee on Disputes clearance did not justify keeping the revenue appeal pending indefinitely, since the matter was otherwise fit for decision on merits. Waste and scrap generated in the course of manufacture were not entitled to exemption under Notification No. 89/95-C.E., and that denial of exemption was upheld. The Commissioner (Appeals) order was held unsustainable and the adjudication order denying exemption and confirming duty was restored.

---

---

Issues: (i) Whether the demand was barred by limitation on account of the date of the show cause notice. (ii) Whether absence of Committee on Disputes clearance justified non-adjudication of the appeal. (iii) Whether waste and scrap generated in the course of manufacture were entitled to exemption under Notification No. 89/95-C.E. dated 18-5-95.

Issue (i): Whether the demand was barred by limitation on account of the date of the show cause notice.

Analysis: The record showed that the show cause notice had in fact been issued on 20-6-2003, while the period involved was January 2002 to March 2003. The finding that the notice was issued only in June 2004 was contrary to the record and unsupported by any material.

Conclusion: The demand was not barred by limitation.

Issue (ii): Whether absence of Committee on Disputes clearance justified non-adjudication of the appeal.

Analysis: Clearance was required, but the appeal had remained pending for several years without justification for the failure to obtain it. Absence of such clearance for an indefinite period could not justify dismissal or adjournment of a revenue appeal where the matter could be decided on merits.

Conclusion: Absence of Committee on Disputes clearance did not prevent disposal of the appeal on merits.

Issue (iii): Whether waste and scrap generated in the course of manufacture were entitled to exemption under Notification No. 89/95-C.E. dated 18-5-95.

Analysis: Both authorities had recorded that the respondents were not entitled to the exemption for waste and scrap generated during manufacture. That finding was not shown to be erroneous.

Conclusion: The waste and scrap were not entitled to exemption under the notification.

Final Conclusion: The order of the Commissioner (Appeals) was unsustainable and the adjudication order denying exemption and confirming duty was restored, resulting in disposal of the matter in favour of the Revenue.

Ratio Decidendi: A limitation finding unsupported by the record cannot stand, and want of Committee on Disputes clearance cannot be used to keep a revenue appeal pending indefinitely where the matter is otherwise fit for decision on merits.

---