2001 (12) TMI 836 - AT - Central Excise

Summary

Issues:
- Duty demand on motor vehicle parts cleared without payment during a specific period.
- Allegation of clandestine removal of goods against the party.
- Contesting the demand on the ground of time-bar.
- Applicability of SSI exemption in relation to the goods.
- Adjudication of the demand and penalty imposed.
- Appeal against the order of the Commissioner (Appeals) regarding duty demand and penalty.

Analysis:
1. Duty Demand and Clandestine Removal Allegation:
During the disputed period, the appellants manufactured motor vehicle parts falling under Chapter 68 of the CET Schedule and cleared them without paying duty. The Department alleged clandestine removal of goods against the party, issuing a show cause notice demanding duty payment of Rs. 3,24,171 invoking the extended limitation period under Section 11A(1) of the Central Excise Act.

2. Contesting Time-Bar and SSI Exemption:
The appellants contested the demand on the basis of time-bar, citing a letter dated 10-4-91 where they informed the Asstt. Collector of their intent to manufacture the goods and sought guidance on SSI exemption. They argued that all material particulars were disclosed in advance to the Department, rendering the demand time-barred.

3. Adjudication and Penalty Imposition:
The adjudicating authority rejected the plea of limitation, upholding the allegation of suppression of information by the party to evade duty payment. They confirmed a duty demand of Rs. 2,72,210 and imposed a penalty of Rs. 3 lakhs. The Commissioner (Appeals) affirmed the duty demand but granted abatement of duty and reduced the penalty to Rs. 1 lakh.

4. Appellate Authority's Decision:
In the appeal, the appellate tribunal found that the appellant did not contest the duty demand on excisability grounds but solely on the basis of limitation. The tribunal noted that all material facts were disclosed to the Department in advance through the letter dated 10-04-91. Citing a relevant case law, the tribunal held that the demand was time-barred as the Department was aware of the relevant facts before issuing the show cause notice.

5. Final Decision and Outcome:
The tribunal allowed the appeal, setting aside the demand as time-barred due to the appellant's disclosure of information in advance. The tribunal emphasized that the allegation of suppression was successfully rebutted by the appellant, leading to the conclusion that both the appellant and the Department were aware of the relevant facts prior to the show cause notice. The appeal was allowed, and the demand was deemed clearly barred by limitation.

This detailed analysis highlights the key legal aspects, arguments presented, adjudication process, and the final decision of the appellate tribunal in the case.