1996 (12) TMI 174

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....to October 1993, they have been availing the money credits at the rates specified in respect of `denatured spirit' used by them as input in the manufacture of the said final product in terms of Rule 57K of CER read with Notification No. 231/87-C.E., dated 1-10-1987 issued thereunder. The denatured spirit is a mixture of `ethyl alcohol' and denaturant in the ratio of 99% and 1% respectively. The jurisdictional range officer who was prima facie of the view that the appellants would not be entitled to avail the money credit in respect of 1% content of the denaturant in the denatured spirit received by them as input, accordingly served a show cause notice dated 25-7-1994 on them proposing to disallow the credits on the above score involving a s....

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....hallenged the same and it is stated in the appeal grounds that Notification No. 231/87 refers to ethyl alcohol only. There is no reference to ethyl alcohol falling under Heading No. 22.04 of the tariff. The notification is not issued for levying excise duty on ethyl alcohol, but for giving certain benefits on excisable products manufactured using ethyl alcohol. The money credit is made available at the rate of Rs. 520/- per KL of ethyl alcohol. In 100 litres of denatured ethyl alcohol, only 99 litres of ethyl alcohol is present and rest one litre is methyl alcohol. The notification cannot be interpreted to give money credit for methyl alcohol. This interpretation is in conformity with Board's clarificatory letter F. No. 267/6/93-CX.8, dated....

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....the findings passed by the Assistant Collector holding that money credit is available only for the ethyl alcohol content which is 99% and not to methyl alcohol which is 1%. 8. However, the learned Counsel stated that the whole demand is barred by limitation. Admittedly, the SCN is issued after a period of six months. The Collector (Appeals) having granted the relief on merits in favour of the respondents did not advert on the limitation aspect. But the Asstt. Collector took this plea of the respondent and held that the period of three years under the Limitation Act is a reasonable period. The learned DR reiterated the same. However, we find that in the SCN there is no allegation of suppression, fraud or wilful mis-statement for invo....