2002 (4) TMI 661 - AT - Central Excise

Summary

Issues: Time bar issue regarding central excise duty demand.

Analysis:
1. The appellant challenged the time bar issue related to the demand for central excise duty covering a period of five and a half years. The appellant argued that the demand was not supported by any provisions of the Central Excise Rules or Act. They contended that the demand was hit by the time bar due to the absence of willful suppression. Citing legal precedents, the appellant emphasized that the extended period under Section 11(A) required more than mere inaction or failure on the manufacturer's part to be invoked. They highlighted cases where the department's full knowledge of facts prevented the application of the extended period. The appellant demonstrated that they had been transparent in their dealings and that the department had access to relevant information through various verification processes.

2. The adjudicating authority rejected the time bar issue based on the assertion that the quantity received back should have been more due to the addition of materials by the job worker, contrary to the 1:1 ratio maintained by the party for several years. The appellant, however, argued that the quantity sent for job work matched the quantity received back, indicating compliance with the established practice and known ratio. The appellant contended that the department was aware of this ratio and practice, further supporting their position on the time bar issue.

3. The Revenue representative argued that the job worker had indeed added alloy during conversion, resulting in a discrepancy between the quantity sent and received. They claimed that this undisclosed addition constituted suppression of facts, justifying the department's actions and the timeliness of the show cause notice issued in 1995 for the period between February 1990 and July 1990.

4. Upon reviewing the submissions and records, the Tribunal found that the duty determination was based on statements from the job workers without clear evidence of the added alloy's extent or resulting losses. Considering the lack of clarity and in line with the legal principles cited by the appellant, the Tribunal gave the benefit of doubt to the assessee. Consequently, the Tribunal accepted the appellant's argument that the demand was time-barred and allowed the appeal with any consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, accepting their plea regarding the time bar issue concerning the central excise duty demand. The decision was based on the lack of conclusive evidence regarding the alleged discrepancy in quantities and the application of legal principles supporting the appellant's position.