2001 (9) TMI 620 - AT - Central Excise

Summary

Issues:
1. Time-barred demand under Rule 9(2) read with proviso to Section 11A of the Central Excise Act.
2. Lack of show cause notice to M/s. Puri Rubber Pvt. Ltd. and its Director.

Analysis:

1. The appeal was filed against the Commissioner's order confirming a demand under Rule 9(2) read with proviso to Section 11A of the Central Excise Act and imposing a penalty. The appellants were alleged to have misused a notification by clearing goods on the invoices of another firm. The Commissioner upheld the demand and penalty, which the appellants contested, claiming the demand was time-barred. The Tribunal found that the show cause notice was issued after more than six months, making it time-barred. The Commissioner wrongly invoked the extended period of limitation without alleging suppression of material facts by the appellants, as required by law. The Tribunal referred to the Collector of Central Excise v. HMM Ltd. case, emphasizing that the extended period can only be used in cases of intentional suppression, which was not proven in this instance. Therefore, the Commissioner's order was set aside due to the time-barred nature of the demand.

2. The appellants also challenged the validity of the order on the grounds that no show cause notice was issued to M/s. Puri Rubber Pvt. Ltd. and its Director, whose clearances were clubbed with the appellants'. The show cause notice did not specify that M/s. Puri Rubber Pvt. Ltd. was a dummy unit of the appellants, and it failed to mention that both firms' clearances were to be combined. The absence of these crucial allegations in the notice prevented the Commissioner from ordering the clubbing of clearances and confirming the demand on the appellants. The Tribunal cited a previous case where a similar issue led to the order being considered legally flawed. As a result, the Tribunal set aside the Commissioner's order on this ground as well. The appeal was accepted, and any consequential relief was granted as per the law.

In conclusion, the Tribunal found in favor of the appellants on both grounds raised, setting aside the Commissioner's order due to the time-barred nature of the demand and the lack of proper show cause notice to the related parties. The judgment highlighted the importance of following legal procedures and requirements, ensuring fairness and adherence to the law in excise matters.