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2010 (6) TMI 685 - AT - Central Excise
Issues involved: Appeal against rejection of appeals by Revenue, remand by High Court on grounds of natural justice, eligibility for concessional duty, invocation of extended period u/s 11A of Central Excise Act, 1944.
Appeal rejection by Tribunal: The Tribunal rejected the appeals filed by the Revenue against the order setting aside the demand for duty against the respondents, along with penalties, on the ground of limitation without delving into merits. Remand by High Court: The High Court remanded the matter to the Tribunal due to a breach of natural justice principles, as the Tribunal dismissed the appeals on the limitation ground without giving the Revenue an opportunity to address it, contrary to the decision of the Commissioner (Appeals) allowing the appeals on merits. Eligibility for concessional duty: The Revenue argued that the respondents were not eligible for concessional duty as they had cleared dyed yarn at a concessional rate of duty, manufactured prior to the date when the unit was converted to a non-composite mill, invoking the extended period u/s 11A of the Central Excise Act, 1944. Invocation of extended period u/s 11A: The Revenue contended that the respondents deliberately evaded duty by clearing goods at a concessional rate of duty, even though they had manufactured dyed yarn prior to the unit's conversion, and had availed modvat credit, leading to the confirmation of demand by the Joint Commissioner invoking the extended period. Decision on limitation aspect: The Tribunal found that the Revenue failed to establish a case on the limitation aspect, as the department was aware of the unit's conversion based on the amended registration certificate and returns filed by the respondents, making the issuance of the show cause notice within the statutory period feasible. Additionally, the Tribunal noted that the Commissioner (Appeals) wrongly applied a Supreme Court decision, rendering the invocation of the extended period unsustainable, ultimately rejecting the appeal filed by the Revenue.
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