2006 (1) TMI 525 - AT - Central Excise

Summary

Issues:
1. Whether the appellants are liable to pre-deposit a certain amount and penalty.
2. Whether the duty payable should be as applicable on the date when the vehicles were removed from the factory gate.
3. Whether the extended period of limitation can be invoked in the absence of suppression of facts.
4. Whether the Show Cause Notice issued beyond the one-year period is time-barred.

Analysis:
1. The appellants were required to pre-deposit a specific amount and penalty. They had claimed the benefit of a notification granting duty exemption until the motor vehicles were cleared to the Embassy. However, as the Embassy did not retain the cars, the appellants sold them to other customers after informing the Central Excise department and paying the duty. The Show Cause Notice was issued beyond one year without any allegation of suppression of facts.

2. The Revenue argued that the duty payable should be as per the date when the vehicles were removed from the factory gate, which was before the clearance to the Embassy. The appellants' position was that the duty had been reduced by the time of clearance from the Embassy, and they had informed the department accordingly. The Tribunal found that the department failed to take action or inform the appellants to pay the balance of the duty, leading to the time bar applying in this case.

3. The question of invoking the extended period of limitation arose, with the department contending that the correct duty should have been paid as of the date when the vehicles were removed from the factory gate. However, the Tribunal noted that without suppression of facts or intentional evasion, the extended period cannot be invoked. The department's inaction and failure to notify the appellants to pay the correct duty within the statutory period led to the time-bar applying.

4. The Tribunal relied on various Supreme Court judgments to support its finding that in the absence of suppression, fraud, or intentional evasion, the extended period of limitation cannot be invoked. As the Show Cause Notice was issued beyond the one-year period and there were no allegations of suppression or fraud, the Tribunal held that the time-bar applied. The appeal and stay application were allowed solely on the ground of time bar, considering all the legal precedents cited.