2008 (5) TMI 480 - AT - Central Excise

Summary

Issues Involved:
The issue involved in this case is the simultaneous availment of Notification No. 175/86 at 'nil' rate of duty for certain goods and concessional rate of duty after availing Modvat credit for other goods by the appellants, leading to a demand of duty and penalty by the Revenue authorities.

Limitation Ground:
The Appellate Tribunal CESTAT, Ahmedabad, in the case, found that the notice issued on 14-5-1996 for the period 1991 was beyond the normal period of limitation as prescribed under law. The appellant had filed classification lists and monthly RT-12 returns, claiming the benefit of the notification, which were duly approved by Central Excise officers without objection. The Adjudicating Authority invoked the longer period on the ground that classification lists were approved provisionally, but it was clarified that assessments cannot be considered provisional without following the procedure under Rule 9B. The Tribunal referred to previous decisions to support this stance. Since no orders for provisional assessments were passed and no proper procedure was followed, the demand raised against the assessee was held to be barred by limitation.

Fluid Legal Situation:
The law at the relevant time was in a state of flux as there were conflicting Tribunal orders regarding the simultaneous availment of Notification No. 175/86. The issue was ultimately settled by a Larger Bench decision in the case of M/s. Kamani Foods. Given the conflicting decisions by authorities, it was concluded that the appellant's actions were not with a mala fide intention. Therefore, the demand was deemed to be hit by the bar of limitation. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.