2007 (9) TMI 513 - AT - Central Excise

Summary

Issues:
1. Barred by limitation - Show cause notice timing
2. Misdeclaration and suppression of facts
3. Extended period invocation for wrongly claimed benefit of notification
4. Misstatement or suppression of facts for invoking longer period
5. Imposition of penalty and interest
6. Confiscation of assets and penalty on the Manager

Analysis:

Issue 1: Barred by limitation - Show cause notice timing
The Appellate Tribunal noted that the duty amount was confirmed against the appellant for clearances of Thermo Plasto Elastomere (TPE) during a specific period. The appellant argued that the show cause notice issued was barred by limitation, except for a 6-month period prior to its issuance. The Tribunal agreed with the appellant, emphasizing that the demand in question was indeed barred by limitation. They set aside the impugned order and remanded the matter for the quantification of the demand within the limitation period.

Issue 2: Misdeclaration and suppression of facts
The Additional Commissioner observed that the appellant had cleared goods without payment of duty under an exemption notification, which they were not entitled to. The Commissioner (Appeal) found that the appellant had misdeclared or suppressed facts regarding their products, leading to the invocation of the extended period for scrutiny. The penalty imposed on the appellant was deemed justified under Rule 173Q due to the misdeclaration and suppression of facts.

Issue 3: Extended period invocation for wrongly claimed benefit of notification
The Revenue invoked the extended period based on the appellant's wrongful claim of the notification benefit. The appellant argued that they had filed regular returns with detailed invoices, and every fact was known to the Revenue. The Tribunal agreed with the appellant, stating that a wrong claim of notification benefit does not amount to misstatement or suppression of facts warranting an extended period.

Issue 4: Misstatement or suppression of facts for invoking longer period
The Tribunal concurred with the appellant's submission that the scrutiny of the declaration, which formed the basis for the show cause notice, could have been done immediately after filing. As the appellant had disclosed all relevant facts in the declaration, the demand was considered barred by limitation. The Tribunal set aside the order and remanded the matter for quantification within the limitation period.

Issue 5: Imposition of penalty and interest
The appellant was granted the liberty to contest the imposition of penalty and interest before the lower adjudicating authority. The confiscation of assets was set aside, and no justifiable reason was found for imposing a penalty on the Manager, leading to its removal.

Issue 6: Confiscation of assets and penalty on the Manager
The Tribunal disposed of both appeals by setting aside the confiscation of plant, machinery, land, and building. Additionally, the penalty imposed on the Manager was also removed, providing relief in this regard.