2008 (12) TMI 573 - AT - Central Excise

Summary

Issues:
1. Allegation of non-payment of duty due to ignorance by the Appellant Assessee.
2. Time-barred show cause notice and applicability of the extended period of 5 years.
3. Allegation of suppression by the Department.
4. Disclosure of manufacturing and clearance of Cotton Fabrics without grooved rollers.
5. Applicability of penalty, interest, and duty amount based on the Supreme Court's decision.
6. Adjustment of Yarn Duty paid by the Appellant Assessee.
7. Directions for re-calculation of penalty and interest by the Original Authority.

Analysis:
1. The Appellant Assessee claimed non-payment of duty due to ignorance, stating that the duty amount was paid subsequently. The Consultant argued against the imposition of interest or penalty, citing no suppression or misdeclaration. The show cause notice was challenged as time-barred, emphasizing the absence of suppression or misdeclaration.

2. The Department contended that the Appellant Assessee suppressed information regarding the clearance of Cotton Fabrics without grooved rollers. Referring to a recent Supreme Court decision, the Department insisted on the payment of duty, interest, and penalty equal to the duty amount.

3. The central issue revolved around whether the Appellant Assessee disclosed the manufacturing and clearance of Cotton Fabrics without grooved rollers. Examination of the RT-12 Returns revealed discrepancies in the declarations filed by the Appellant Assessee, leading to further investigation.

4. It was established that the declaration regarding the calendering process was made after a specific date. The judgment referred to a Supreme Court decision to determine the period for which the Department could raise demands or impose penalties.

5. The Consultant requested the adjustment of Yarn Duty paid by the Appellant Assessee. The Tribunal directed the Original Authority to consider this adjustment along with re-determining the penalty and interest based on the duty amount for a specific period.

6. Consequently, the impugned Order was set aside, and the matter was remanded to the Original Authority with specific directions regarding the re-calculation of penalty and interest, examination of the Yarn Duty adjustment, and providing the Appellant Assessee with a fair hearing opportunity.

7. Both Appeals were partly allowed through remand, and the Cross-Objection filed by the Respondent Assessee was also disposed of accordingly.