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2008 (9) TMI 685 - AT - Central Excise
Issues:
1. Time-barred demand of excise duty. 2. Allegation of suppression with intent to evade payment of duty. Analysis: Issue 1: Time-barred demand of excise duty The appellant contended that the demand for excise duty was time-barred as a show cause notice was issued in 1990 for the period between 1985 and 1988. They argued that they had been following the instructions issued by the revenue since 1957 regarding maintaining records, including a private packing register. The appellant maintained that they did not suppress any facts intentionally to evade duty payment, as both the records were maintained in compliance with the revenue's instructions. Furthermore, the appellant mentioned that the private packing register, seized by the revenue, was crucial for reconciliation purposes. The Tribunal found merit in the appellant's argument, considering the historical compliance with instructions and the lack of intentional suppression. As a result, the demand was deemed time-barred, and the appeal was allowed on this ground. Issue 2: Allegation of suppression with intent to evade payment of duty The revenue contended that the appellant was required to maintain records as per the annexure to a trade notice issued in 1976, which indicated higher production of wrapping paper than what was disclosed. The revenue argued that the demand for duty was justified based on these discrepancies. However, the appellant clarified that the wrapping paper was solely used for packing newsprint, which was duty-exempt. They emphasized that they maintained separate records in compliance with circulars from 1957 and the 1976 trade notice. The appellant highlighted that the private packing register, seized by the revenue, was essential for reconciling the quantities in both records. The Tribunal acknowledged the appellant's adherence to the trade notice instructions and the unrecovered private packing register. Considering these factors, the Tribunal concluded that the allegation of suppression with intent to evade payment of duty was not sustainable. Consequently, the demand was set aside on the basis of being time-barred, and the appeal was allowed in favor of the appellant.
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