2009 (4) TMI 678 - AT - Central Excise

Summary

Issues:
1. Consideration of bar of limitation for issuance of show cause notice.
2. Allegations of suppression of facts by the appellant.
3. Granting waiver of pre-deposit under Section 35F of the Central Excise Act, 1944.

Analysis:
1. The matter was heard following an order by the Delhi High Court. The appellant contended that the lower authority did not properly consider the bar of limitation for issuing the show cause notice, resulting in injustice. The appellant highlighted relevant correspondence from September 2003, disclosing advertising expenditure contributions by the appellant and their dealers. The show cause notice period was from June 2002 to March 2005. The appellant argued that there was no suppression of facts, as evidenced by previous court decisions in favor of the company. The appellant sought waiver of pre-deposit under Section 35F based on these grounds.

2. The Department's representative argued that there was clear suppression of the arrangement between the appellant company and their dealers regarding sharing advertising expenditure. The representative referred to para 14 of the impugned order, stating that the facts on record supported the allegation of suppression. Granting total waiver of pre-deposit, according to the Department, would prejudice the Revenue's interest. The Department's stance was that the authority had not ignored the materials on record while considering the issue of limitation.

3. Upon perusal of the impugned order, it was observed that the lower authority did not adequately consider the correspondence between the parties regarding the information disclosed to the Department about sharing advertisement expenditure. The letter dated 11th September 2003, along with annexures, revealed the information provided by the appellant. The impugned order lacked reference to this crucial information. The Tribunal found that the mere observation of the appellant's advertising practices might not be sufficient to invoke the extended period of limitation. Given the circumstances, insisting on pre-deposit would cause significant hardship to the appellant. Consequently, the Tribunal granted the application for stay and waived the requirement of pre-deposit under Section 35F. The impugned order demanding duty and interest was stayed pending appeal resolution.