(i) Whether the assessee is entitled to exemption in terms of Notification No. 74/62 as amended or not.

(ii) Whether the demand was barred by time.

2. Shri Anand submitted that eligibility of Notification No. 74/62 dated 24.4.1962 as amended, has been denied by the department on the ground that scrap admixture with duty paid pig iron is used in the manufacture of final products and hence the final products are not manufactured only from scrap. He submitted that Notification No. 74/62 does not specify that final products are to be produced only out of old iron and steel scrap. He submitted that the very issue has come up for consideration before Patna High court in the case reported in 1989 (42) ELT 353 with reference to the very Notification No. 74/62 wherein the High Court has observed that "the Notification dated 24.4.1962 being an exemption notification, the same has to be construed, in case ambiguity, in favour of the assessee and against the department. The said notification clearly provides for exemption in respect of payment of excise duty to steel ingots falling under item No. 26, only subject to the condition that if (i) they are produced out of scrap obtained from duty paid pig iron, the duty payable is Rs. 30/- per M.T., and (ii) they are produced out of old iron and steel scrap or scrap obtained from duty paid steel ingots or product, no duty is payable. Therefore, it has to be held that the Trial Court misdirected itself in interpreting the notification in holding that the notification was not applicable in relation to the steel ingots manufactured by the appellants out of the old skull scraps admixture with other materials for the purpose of manufacturing the same. In the premises, it must he held that Notification No. 75/62 applies to the case of the appellant." He also submitted that High Court also dealt with the Notification No. 74/62 as can be seen from paragraphs 3, 5 and 6 of the said order and also submitted that even the wordings of Notification No. 74/62 are similar to Notification No. 75/62 and on the same analogy the exemption cannot be denied. Further in support of his contention, he referred to the decision of the Tribunal in the case of M/s. Aravali Ispat Ltd., reported in 1986 (9) ECR-516 which followed the decision of the Supreme Court in the case of Tata Iron and Steel Co. Ltd., reported in 1975 Cen-Cus 62C S.C. ECR C490-(S.C.). Reliance has also been placed by him in the case of Electro Steel Castings v. Collector of Central Excise, reported in 1989 (44) ELT 659 and Indian Organic Chemicals reported in 1988 (35) ELT 535.

3. Further he contended that demand was barred by time in as much as there was no suppression on the part of the appellants to invoke larger period. He submitted that it is true that matter was on litigation by way of Writ Petition before the High Court of Andhra Pradesh and Writ Petition has been disposed of on 15-11-1986 and after a lapse of 1-1/2 years the department has issued show cause notice on 16.4.1988 for the recovery of duty. Accordingly, the demand was barred by time. It is submitted that Tribunal has taken the view in the case of S.B. kemexc Industries v. Collector of Central Excise, reported in 1995 (75) ELT 377 that show cause notice not issued for one year even after the receipt of the information by the Department, extended period of limitation not applicable since the department was aware of the assessee's operation as evident from the correspondence, etc.

4. Shri A.K. Agarwal, learned SDR countering the arguments drew our attention to the findings given by the Collector, particularly he referred to the relevant para which reads as under:-

"The next point which arises is whether the assessee is entitled to exemption under Notification No. 74/62 dated as amended. As observed earlier, this notification exempts pig iro