Duty exemption for ship-breaking scrap and extended limitation turned on tariff fit, disclosure duties, and retrospective coverage.

Exemption for waste and scrap from ship breaking under Notifications No. 208/83-C.E. and 101/87-C.E. was confined to inputs and final products matching the tariff descriptions, with the inputs having borne the required duty and no credit taken. Materials from ship breaking were treated as outside the notification for the relevant periods, and the later amendment was viewed as creating new coverage rather than clarifying existing relief, so it did not apply retrospectively. On limitation, non-filing of proper declarations and returns, together with the absence of specific departmental notice, supported the extended period; the demands were therefore not time-barred.

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Issues: (i) Whether waste and scrap arising from ship breaking and similar inputs purchased from traders were eligible for exemption under Notification No. 208/83-C.E. and the later Notification No. 101/87-C.E.; (ii) Whether the demands were barred by time.

Issue (i): Whether waste and scrap arising from ship breaking and similar inputs purchased from traders were eligible for exemption under Notification No. 208/83-C.E. and the later Notification No. 101/87-C.E.

Analysis: The notification granted exemption only where the specified inputs and final products matched the tariff descriptions and the inputs had borne the requisite duty or countervailing duty without credit having been taken. The materials obtained from ship breaking were held not to fall within the notification as it stood during the relevant periods, and the subsequent amendment was treated as introducing a new coverage rather than clarifying an existing one. The later notification was therefore held not to operate retrospectively.

Conclusion: The exemption was not available on the merits; the assessees were not entitled to relief under the notifications for the relevant periods.

Issue (ii): Whether the demands were barred by time.

Analysis: The record showed that the assessees were outside licensing control, no proper declarations or returns were filed for the relevant period, and the department did not have the specific notice needed to negate the extended period. The claimed bona fide belief did not displace the statutory responsibility to disclose the activity and the raw materials used.

Conclusion: The demands were not time-barred and the extended period was held available.

Final Conclusion: The appeals failed both on merits and on limitation, and the impugned demands were sustained.

Ratio Decidendi: Exemption under the relevant notification could be claimed only if the specified inputs satisfied the tariff description and duty-paid conditions for the relevant period, and limitation would not defeat the demand where the assessee had not made the requisite disclosures and the department lacked specific notice of the clearances.

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