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2003 (8) TMI 392 - AT - Central Excise
Issues:
1. Bar on demand by limitation due to conflicting decisions on the classification of the product. 2. Interpretation of the Larger Bench decision regarding the period of limitation when the department has knowledge about the activities of the assessee. Analysis: 1. The appellant sought a waiver of pre-deposit of duty and penalty on Ammonium Nitrate, contending that the demand is time-barred as the show cause notice was issued beyond the six-month period. The appellant argued that there was full disclosure regarding the clearance of the disputed item as they had filed classification declarations stating they were clearing crystalline ammonium nitrate at nil rate of duty. The appellant highlighted conflicting decisions on whether the process of purification amounts to manufacture. The Tribunal observed that suppression with intent to evade duty cannot be alleged when conflicting decisions exist, citing relevant case law. The Tribunal found merit in the argument that the demand is barred by limitation and waived the pre-deposit of duty and penalty pending the appeal. 2. The respondent opposed the waiver, stating that the process of manufacture was concealed from the department as the appellant was separating crystalline ammonium nitrate from calcium ammonium nitrate, contrary to what was declared in the classification declaration. The Tribunal considered the plea of time bar and noted that while the lower appellate authority relied on a Larger Bench decision to hold that the five-year limitation period applies even when the department has knowledge, this interpretation was clarified in other cases. The Tribunal referred to various decisions to determine that the demand was prima facie barred by limitation, especially in cases where there are conflicting decisions and conscious knowledge by the department. Therefore, the Tribunal waived the pre-deposit of duty and penalty, staying the recovery pending the appeal.
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