Exemption for goods made from non-specified scrap denied; nondisclosure of material facts supported extended limitation under excise law.

An exemption notification limited to goods manufactured from inputs specified in its annexed table could not be claimed for finished products made from market-purchased waste and scrap, because iron and steel scrap under Heading 7204 was not a specified input. On that basis, the benefit of Notification No. 208/83-C.E. was denied. Non-disclosure in the classification list that the final products were manufactured from waste and scrap amounted to suppression of material facts, so the extended period of limitation under Section 11A was held invokable. The impugned order was set aside and the Revenue's appeal was allowed.

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Issues: (i) Whether finished products manufactured out of waste and scrap purchased from the market were entitled to exemption under Notification No. 208/83-C.E. dated 1-8-1983. (ii) Whether the extended period of limitation under Section 11A of the Central Excise Act was invokable.

Issue (i): Whether finished products manufactured out of waste and scrap purchased from the market were entitled to exemption under Notification No. 208/83-C.E. dated 1-8-1983.

Analysis: The exemption was available only where the final products were manufactured from inputs specified in the Table annexed to the notification. Waste and scrap of iron and steel falling under Heading 7204 of the Central Excise Tariff was not one of the specified inputs. The benefit of the notification could therefore not be extended to finished products made from market-purchased waste and scrap.

Conclusion: The exemption under Notification No. 208/83-C.E. was not available to the finished products manufactured from such scrap, and the finding was against the assessee.

Issue (ii): Whether the extended period of limitation under Section 11A of the Central Excise Act was invokable.

Analysis: The respondents had not disclosed in the classification list that the final products were manufactured out of waste and scrap while claiming the exemption. Non-disclosure of the material fact constituted suppression from the Department, attracting the extended period of limitation.

Conclusion: The extended period of limitation under Section 11A of the Central Excise Act was invokable, and the finding was against the assessee.

Final Conclusion: The impugned order was set aside and the Revenue's appeal was allowed.

Ratio Decidendi: An exemption notification conditioned on use of specified inputs cannot be claimed for goods manufactured from non-specified scrap purchased from the market, and non-disclosure of such material facts supports invocation of the extended limitation period.

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