2006 (6) TMI 345 - AT - Central Excise

Summary

Issues:
1. Whether the appellants are related persons and assessments should be done under Section 4(1)(b) of CE Act.
2. Whether the show cause notice issued is time-barred.

Analysis:

1. The issue of whether the appellants are related persons was the primary contention in this case. The Revenue alleged in the show cause notice that the appellant and another entity were related persons, necessitating assessments under Section 4(1)(b) of the CE Act. However, a contradiction arose as the Commissioner denied making such an allegation in the comments filed later. The Tribunal noted this contradiction and emphasized that the Commissioner had already found that the appellant and the other entity were not related persons. Consequently, the assessments could not be based on the premise of related persons. The Tribunal sided with the appellants, stating that the assessments were rightly done, and upheld their contention. Additionally, the Tribunal considered the plea of time bar raised by the appellants, asserting that the show cause notice issued for a specific period was time-barred. The Tribunal found no suppression of facts and concluded that since the Commissioner had determined the entities were not related, there was no basis for invoking a larger period. Therefore, the appellants succeeded on both points, leading to the unconditional allowance of the stay application and a full waiver of the pre-deposit.

2. The second issue revolved around the time-bar aspect of the show cause notice. The appellants argued that the notice issued for raising demands for a particular period was barred by time since all relevant facts were known to the department. The Tribunal examined the material presented and concurred that there was no suppression of facts. Moreover, once it was established that the entities were not related persons, the Tribunal determined that there was no justification for invoking a larger period. Consequently, the Tribunal granted full waiver of the pre-deposit and stayed the recovery, acknowledging the likelihood of success for the appellants in the matter. The case was scheduled for final hearing on a later date due to the substantial revenue involved.