ORDER
G.R. Sharma
1. In the impugned order, the Collector confirmed the demand of Rs. 47,182.80 under Rule 9 (2) read with proviso to Section 11A of the Central Excise Act, 1944. He also imposed a penalty of Rs. 40,000/-.
2. The facts of the case briefly stated are that the appellants are engaged in the manufacture of submersible pump sets and electrical motors and parts thereof. They were availing exemption under Notf. No. 67/86 dt. 10.2.86 on parts of electric motors used captively in the submersible pump sets. This notification was rescind by Notf. No. 129/88 dt. 1.3.86. However, the concession was again introduced by Notf. No. 142/88 dt. 18.4.88. The appellants however availed the benefit of Notf. No. 67/86 during the period 1.3.88 to 17.4.88 when the concession was withdrawn. Accordingly a SCN was issued to the appellants asking them to explain as to why the duty should not be demanded from them during the period 1.3.88 to 17.4.88. SCN was issued on 21.12.89.
3. In reply to the SCN, the appellants submitted that it was in June, 1988 when they came to know that the Notfn. No. 67/86 dt. 10.2.86 had been rescinded and that on 18.3.88 they had approached the Collector and on 21.3.88 they approached the Board for consideration of their case under Section 11C for the period 1.3.88 to 17.4.88. They also contended that the demand was time barred; that there was no malafide intention on the part of the appellants to evade payment of duty. It was submitted that the extended period beyond six months for demanding duty was not applicable to their case.
4. After considering the submissions and the evidence on records, the Collector held as indicated in aforesaid paragraph.
5. No one appeared for the appellants. However there is a request for consideration their case on merits.
6. Shri R.C. Sankhla, ld. DR submits that the demand was raised for the period 1.3.88 to 17.4.88 when there was no exemption available on parts of electric motors used in submersible pump sets. He submits that the appellants did not disclose the fact of withdrawal of notification during this period. He submits that the assessments in form RT 12 returns were finalised during this period. He submits that the duty has correctly been demanded and, therefore prays that the duty may be confirmed.
7. On the question of limitation, ld. DR submits that the appellants knew that there was no exemption available on electric motor parts captively consumed in the manufacture of submersible pump sets. He submits that inspite of knowing this fact the appellants cleared the gods without payment of duty and thus the intention to evade payment of duty was clear and that limitation was not applicable in the instant case. Ld. DR, therefore prays that the appeal may be rejected.
8. We heard the submission of the ld. DR. We have perused the evidence on records and written submissions of the appellants. We find that two issues arise in the present case. The first issue is whether the demand has correctly been confirmed and the second issue is whether the demand is time barred.
9. On the first issue i.e. whether the demand has correctly been raised, we find that Notf. No. 67/86 dt. 10.12.86 was rescinded by Notf. No. 128/88 dt. 1.3.88. We also note that the exemption of duty on parts of electric motors captively consumed in the manufacture of submersible pump sets was introduced again on 18.4.88 by issue of Notf. No. 142/88. Thus, we note that during the period 1.3.88 to 17.4.88, there was no exemption available. We, therefore hold that the demand has correctly been confirmed by the authorities below.
10. On the second issue of limitation, we note that the appellants were submitting RT 12 returns from time to time. RT 12 returns were being finally assessed by the authorities below. The appellants have represented against withdrawal of concession and thus the department was aware that the concession has been withdrawn. Inspite of that fact the assessments in form RT 12 were being finalised. We, therefore hold that the demand is time barred.
11. In the circumstances and the findings recorded above, we allow the appeal.