2003 (6) TMI 240 - AT - Central Excise

Summary

Issues:
1. Demand for duty short-levied due to alleged undervaluation of containers supplied.
2. Applicability of the period of limitation under Section 11A of the Central Excise Act.
3. Validity of the show cause notices issued within the normal period.
4. Quashing of the impugned show cause notice and order on the ground of limitation.

Analysis:

Issue 1: Demand for duty short-levied
The case involves a manufacturer of iron and steel drums and containers working on a job work basis for a company. The appeal concerns duty short-levied due to alleged undervaluation of the containers supplied. The demand covers the period from April 1996 to January 2001, with a show cause notice issued on 15-4-2001.

Issue 2: Applicability of period of limitation
The appellant argued that the demand was beyond the limitation period specified in Section 11A of the Central Excise Act. They contended that the extended period of five years for demand is only applicable in exceptional circumstances involving fraud, collusion, suppression of facts, or misstatement of facts with intent to evade duty. The appellant highlighted that the jurisdictional authorities were aware of all relevant facts, having issued show cause notices within the normal period. Therefore, invoking the extended period for demand was unjustified.

Issue 3: Validity of show cause notices
The appellant claimed that the consolidated show cause notice for the extended period of 5 years issued by the Commissioner was unnecessary and illegal since show cause notices had already been issued within the normal period by the Deputy Commissioner/Assistant Commissioner. The Tribunal agreed with the appellant, stating that the subsequent notice by the Commissioner was superfluous and that the pending notices on the same issue indicated redundancy in issuing the extended period notice.

Issue 4: Quashing of the impugned show cause notice
The Tribunal upheld the appellant's objection on the ground of limitation and quashed the impugned show cause notice and order as superfluous and not maintainable due to being beyond the period of limitation. However, the Tribunal clarified that the pending notices issued within the normal period by competent authorities were still valid and could be adjudicated separately. The authorities were directed to proceed with the adjudication of those notices promptly.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's decision, ensuring a detailed understanding of the legal aspects involved in the case.