1988 (2) TMI 213 - AT - Central Excise

Tribunal remands case for re-evaluation by Collector of Central Excise

The Tribunal set aside the impugned order and remanded the matters to the Collector of Central Excise (Appeals), Bombay, for a de-novo examination. The ... Phenol formaldehyde moulding powder and Urea formaldehyde moulding powder Issues Involved:1. Eligibility for concessional rate of duty under Notification No. 7/80.2. Inclusion of P.F. Moulding Powder in the appeal.3. Basis of findings by the Collector (Appeals).4. Allegation of suppression or mis-statement by the assessee.5. Applicability of the longer time-limit for duty demand.Detailed Analysis:1. Eligibility for Concessional Rate of Duty under Notification No. 7/80:The core issue revolves around whether the Urea Technical Grade used by M/s. Indian Plastics Limited in the manufacture of U.F. Moulding Powder qualifies for a concessional rate of duty under Notification No. 7/80, dated 27-2-1980. The notification exempts certain artificial or synthetic resins and plastic materials manufactured from raw naphtha or chemicals derived therefrom on which the appropriate amount of Central Excise duty has already been paid. The contention is that the Urea Technical Grade received from M/s. Rashtriya Chemicals and Fertilizers Ltd. was manufactured partly from associated gas and partly from raw naphtha, thus not fully meeting the criteria for the concessional rate.2. Inclusion of P.F. Moulding Powder in the Appeal:The Collector of Central Excise (Appeals) included P.F. Moulding Powder in his order, although the application under Section 35E(4) of the Central Excises and Salt Act, 1944, filed by the Collector of Central Excise, Bombay-1, did not specifically mention P.F. Moulding Powder. The appeal primarily dealt with U.F. Moulding Powder. The Collector (Appeals) stated that both U.F. and P.F. Moulding Powders were derived from Technical Grade Urea and that the technical grade urea could not be considered to have been made solely from raw naphtha. However, the Tribunal found no reference to P.F. Moulding Powder in the application, necessitating a de-novo examination.3. Basis of Findings by the Collector (Appeals):The Collector (Appeals) based his findings on certain letters from the Superintendent of Central Excise, Rashtriya Chemicals and Fertilizers Ltd., which stated that Technical Grade Urea was exclusively manufactured from Ammonia obtained from raw naphtha. However, the Collector (Appeals) did not provide detailed reasons for his conclusion that Ammonia was prepared from both raw naphtha and associated gas. The Tribunal noted that these letters were not placed before it, making it difficult to verify the findings. Therefore, the matter was remanded for a detailed re-examination with reference to these documents.4. Allegation of Suppression or Mis-statement by the Assessee:The Department's appeal argued that the assessee had filed a wrong declaration to get their classification list approved, which should invoke a longer time-limit for duty demand. The Collector (Appeals) had held that there was no allegation of suppression or mis-statement in the show cause notice, restricting the demand period to six months. The Tribunal noted that neither party had produced a copy of the show cause notice, making it impossible to examine the grounds of the Department's appeal. This issue was also remanded for re-examination.5. Applicability of the Longer Time-limit for Duty Demand:The Department contended that a longer time-limit of five years should apply to the demand for duty due to alleged mis-statements by the assessee. The Tribunal observed that the Department failed to substantiate this claim with necessary documents, such as the show cause notice. Consequently, the Tribunal remanded this issue for the Collector of Central Excise (Appeals) to examine and provide a detailed finding after giving both parties an opportunity to present their cases.Conclusion:The Tribunal set aside the impugned order and remanded the matters to the Collector of Central Excise (Appeals), Bombay, for a de-novo examination. The Collector (Appeals) is to re-evaluate the eligibility for concessional duty, the inclusion of P.F. Moulding Powder, the basis of his findings, the allegation of suppression or mis-statement, and the applicability of the longer time-limit for duty demand. The proceedings are to be completed within four months from the date of receipt of the Tribunal's order.