2007 (3) TMI 508 - AT - Central Excise

Summary

Issues Involved:
1. Whether the levy of Central Excise duty was time-barred under Section 11A(1) of the Central Excise Act, 1944.
2. Legitimacy of interest and penalties imposed under Rule 209A of the Central Excise Rules, 1944.
3. Validity of the third adjudication proceeding based on the same facts as previous adjudications.
4. Whether the appellant's actions constituted willful mis-statement or suppression of facts to evade duty.

Issue-Wise Detailed Analysis:

1. Whether the levy of Central Excise duty was time-barred under Section 11A(1) of the Central Excise Act, 1944:
The appellant argued that the levy of Central Excise duty of Rs. 24,49,56,541/- was time-barred under Section 11A(1) of the Act. The Tribunal noted that the same facts had already been adjudicated twice for the periods September 1994 to March 1995 and April 1995 to July 1996. Both adjudications had reached finality without any appeal by the Revenue. The Tribunal emphasized that reopening a case on the same facts without new evidence is uncalled for by mere change of opinion. The Tribunal referred to the Supreme Court's ruling in Commissioner of Income-tax, Gujarat v. Bhanji Layji, which held that reassessment cannot be initiated on a change of opinion if primary facts were fully disclosed initially. Therefore, the third adjudication was deemed time-barred.

2. Legitimacy of interest and penalties imposed under Rule 209A of the Central Excise Rules, 1944:
The appellant contended that the penalties imposed on its sister concern and head office were unjust and illegal. The Tribunal found that the penalties were based on the same set of facts as the previous adjudications, which had already been settled. The Tribunal highlighted that the appellant had consistently followed the procedure for DTA sales and had disclosed all necessary information in their returns. Therefore, the imposition of penalties was unwarranted.

3. Validity of the third adjudication proceeding based on the same facts as previous adjudications:
The Tribunal noted that the third adjudication was initiated without any new evidence or discovery of contrary facts. The Tribunal referred to the Supreme Court's ruling in Nizam Sugar Factory v. Collector of Central Excise, A.P., which held that perpetuating litigation on the same facts is undesirable. The Tribunal concluded that the third adjudication was vexatious and based on suspicion, lacking any new material evidence. Hence, the third adjudication proceeding was invalid.

4. Whether the appellant's actions constituted willful mis-statement or suppression of facts to evade duty:
The Revenue argued that the appellant had mis-stated facts by quoting the permit number of the Raipur unit in their returns. However, the Tribunal found no evidence of willful mis-statement or suppression of facts. The Tribunal referred to the Supreme Court's ruling in Cosmic Dye Chemical v. Collector of Central Excise, which held that mis-statement or suppression must be willful to invoke the extended period under Section 11A. The Tribunal concluded that the appellant had disclosed all necessary information transparently, and there was no intention to evade duty.

Conclusion:
The Tribunal set aside the order of adjudication, holding that the third adjudication was time-barred and invalid. The penalties and interest imposed were also deemed unjust and illegal. The Tribunal emphasized that reopening a case on the same facts without new evidence is unsustainable, and there was no willful mis-statement or suppression of facts by the appellant. The appeal was allowed, and all other issues raised by the Revenue were deemed unnecessary for decision.