Section 11C relief for captive limestone use barred excise duty demand where non-levy was the prevailing practice.

Section 11C relief can nullify an excise demand where the Central Government recognises a prevailing general practice of non-levy for the covered goods and period. The Tribunal noted that limestone crushed and used captively in cement clinker manufacture during 20-3-1990 to 16-9-1990 fell within Notification No. 10/96-C.E. (N.T.), which declared that duty was not required to be paid for that period because of the general practice in the commissionerate. On that basis, the demand had no surviving legal foundation and was set aside.

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Issues: Whether the duty demand on limestone used captively in the manufacture of cement clinker for the relevant period survived in view of the notification issued under Section 11C.

Analysis: The demand related to limestone crushed and used captively in a cement factory during the period 20-3-1990 to 16-9-1990. The Tribunal noted that the Central Government had issued Notification No. 10/96-C.E. (N.T.) dated 25-6-1996 under Section 11C of the Central Excise Act, 1944, declaring that limestone not subjected to excise duty during the relevant period due to the general practice prevailing in the commissionerate was not required to be paid. In view of that statutory notification, the basis for the demand was removed.

Conclusion: The duty demand on the disputed limestone did not survive and the appeals were allowed in favour of the assessee.

Final Conclusion: The impugned demands were set aside as the statutory relief under Section 11C covered the relevant period and use of limestone for cement clinker manufacture.

Ratio Decidendi: Where the Central Government issues a notification under Section 11C recognizing a prevailing general practice of non-levy for a specified period, excise duty demand contrary to that practice for the covered goods and period cannot be sustained.

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