2008 (6) TMI 401 - AT - Central Excise

Demand - Limitation - non invocation of Extended period - Held that - there is no evidence to suggest intention to evade on the part of the appellant. We are inclined to accept that it was due to lack of understanding of the provisions of Notification. As it appears to be case of difference in interpretation we hold that invocation of extended period for demanding duty is not justified. Imposition of penalty is also not warranted - we uphold the demand of duty involved within the normal period of limitation and we set aside the demand of the balance of duty involved. Penalty is set aside.

Summary

Issues:
Appeal against order of Commissioner (Appeals) regarding exemption under Notification No. 5/99 and 8/99 for two manufacturing units.

Analysis:
The appeal was made against the order of the Commissioner (Appeals) regarding the eligibility for exemption under Notification No. 5/99 and 8/99 for two manufacturing units. The appellant had two units, one at Kapurthala and the other at Hoshiarpur. The Kapurthala unit claimed value-based exemption under Notification No. 5/99 and 8/99 for different products, while the Hoshiarpur unit manufactured products covered under Notification No. 8/99. The appellant filed a classification list for the Hoshiarpur unit, disclosing the existence of the Kapurthala unit but did not provide details of clearance of products covered under Notification No. 5/99. The original authority held that the value of clearance of products from the Kapurthala unit, including those under Notification No. 5/99, should have been disclosed for determining the exemption for the Hoshiarpur unit. Consequently, a demand was confirmed along with a penalty, which was upheld by the Commissioner (Appeals).

The appellant contended that there was no intention to suppress details and argued that the value of clearances under a different notification need not be included for the Hoshiarpur unit. The appellant claimed lack of intention to evade excise duty. The Departmental Representative argued that the clearance figures for both products from the Kapurthala unit should have been disclosed, and failure to do so was intentional to evade duty. The Tribunal considered both sides' submissions and acknowledged that the value of clearances from the Kapurthala unit was relevant for determining the exemption for the Hoshiarpur unit. However, the Tribunal found no evidence of intentional evasion on the part of the appellant. It was noted that the non-furnishing of details was due to a lack of understanding of the notification provisions, indicating a difference in interpretation. As a result, the Tribunal held that invoking the extended period for demanding duty was unjustified, and the imposition of a penalty was unwarranted.

In conclusion, the Tribunal upheld the duty demand within the normal limitation period and set aside the demand for the balance of duty. The penalty was also set aside. The appeal was disposed of with the relief indicated, emphasizing that the lack of evidence of intentional evasion led to the decision in favor of the appellant.