Limitation issue in Central Excise case resolved in favor of appellants

UTKAL AUTOMOBILES LTD. Versus COMMISSIONER OF C. EX., JAMSHEDPUR

UTKAL AUTOMOBILES LTD. Versus COMMISSIONER OF C. EX., JAMSHEDPUR - 2001 (135) E.L.T. 315 (Tri. - Kolkata) Issues:
- Confirmation of demands of duties and imposition of penalties by the Commissioner of Central Excise, Jamshedpur on various appellants for manufacturing bodies of motor vehicles on duty-paid chassis.
- Exemption under specific notifications for bodies built on duty-paid chassis for motor vehicles meant for transport of goods and carriage of passengers.
- Challenge on merits regarding marketability of manufactured items and imposition of duties.
- Challenge on limitation grounds due to issuance of show cause notices beyond the normal period.
- Reference to Notification No. 9/96-C.E.(N.T.) for a specific period.
- Difference of opinion between members regarding the applicability of limitation and the decision on stay petitions.

Detailed Analysis:
1. The judgment involved the confirmation of demands of duties and penalties by the Commissioner of Central Excise, Jamshedpur on appellants manufacturing bodies of motor vehicles on duty-paid chassis. The issue revolved around the imposition of duties on bodies built on chassis for transport of goods and passengers, subject to specific notifications exempting such activities under certain conditions.

2. The challenge on merits focused on the marketability of the manufactured items and the imposition of duties. The appellants argued that the items were not goods in the legal sense as they were not standardized or marketable. They contended that the burden of proving marketability rested on the Revenue.

3. The challenge on limitation grounds arose due to show cause notices being issued beyond the normal period. The appellants argued that the Revenue was aware of the manufacturing processes, as evidenced by filed classification lists and approved exemptions under Notification No. 217/86. They claimed that there was no suppression of information from the Revenue.

4. A reference was made to Notification No. 9/96-C.E.(N.T.) for a specific period, highlighting a general practice of not levying duty on component parts/structures during that time. The appellants argued for consistency in applying such reasoning to parts/components of motor vehicles for transport of goods.

5. A difference of opinion between members regarding the applicability of limitation was noted, with the majority view favoring the appellants on the point of limitation. The Third Member's decision emphasized the justification for granting unconditional stay based on the prima facie conclusion that demands were barred by limitation.

6. Ultimately, the judgment held that the demands were indeed barred by limitation. The impugned Orders were set aside, and all appeals were allowed with consequential reliefs to the appellants based on the discussions and findings regarding the limitation issue.