2009 (4) TMI 745 - AT - Central Excise

Summary

Issues:
Revenue's appeal against OIA No. 28/2008 (T) CE, dated 27-6-08 - Time-barred demand for duty on denatured spirit and fusel oil - Appellant's manufacturing activities and duty liability - Anti-evasion visit and subsequent show cause notice timing.

Analysis:
The appeal pertains to the Revenue challenging the Order-in-Appeal (OIA) setting aside a demand for duty on denatured spirit and fusel oil against the appellant, engaged in manufacturing rectified spirit and extra neutral alcohol. The appellant's unit was under the control of the State Excise Department. The departmental officers found discrepancies in duty payment for denatured spirit and fusel oil during 2004-05. The appellant's manager confirmed the unit's defunct status until 2003 and detailed the manufacturing processes. The adjudicating authority upheld the demand and penalties, but the Commissioner (Appeals) set it aside on time-bar grounds, leading to the Revenue's appeal.

The Revenue argued that the show cause notice was not time-barred as the appellant failed to register with the Central Excise Department and pay duty. The appellant contended that the notice issued in 2007 was time-barred since the last statement was recorded in 2005, and no further actions were taken until 2007. The Commissioner (Appeals) relied on precedent to support the time-bar decision, emphasizing that the duty demand was beyond the normal limitation period. The Tribunal concurred, citing the Supreme Court's ruling in Gammon India Ltd. v. Commissioner, to dismiss the Revenue's appeal based on the time-bar issue.

The Tribunal found no dispute regarding the rectified spirit denaturation process. The show cause notice was issued in 2007, based on anti-evasion officers' visit and statements collected in 2005. The Commissioner (Appeals) justified the time-bar decision with reference to relevant case law, leading to the order setting aside the demand. The Tribunal upheld this decision, aligning with the Supreme Court's precedent, and dismissed the Revenue's appeal due to the time-bar issue.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, emphasizing the time-bar aspect and dismissing the Revenue's appeal. The judgment highlights the importance of adhering to statutory provisions and timelines in duty-related matters, ensuring legal compliance and timely actions to avoid time-bar challenges in tax disputes.