2017 (1) TMI 1551 - AT - Central Excise

Time limitation - whether the SCN is barred by limitation? - Held that - the extended period of limitation is bad and is set aside - the demand for the normal period is upheld which the appellant is directed to pay under intimation to the jurisdictional authorities - penalty also set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the show-cause notice is barred by limitation.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI revolves around the issue of whether the show-cause notice issued on 06.09.2005 is barred by limitation. The appellant's counsel argued that the notice was based on the alleged non-inclusion of the cost of mould supplied by customers in the assessable value of plastic materials manufactured by the appellant. The counsel highlighted that the appellant had not brought this fact to the department's notice, which was considered as suppression with intent to evade duty. The appellant's submission included details of discussions with the Range Superintendent of Central Excise regarding the determination of selling price, where 2% was added for mould maintenance and amortization cost. The appellant justified the 2% loading by presenting an analysis of its Balance Sheet since 1994-95, showing actual tool maintenance costs between 1.15% to 1.38%. The appellant also submitted working of cost considerations certified by a Chartered Accountant. Despite the appellant's arguments, the Commissioner (Appeals) rejected the ground of limitation.

The Assistant Commissioner (AR) reiterated the impugned order, emphasizing that the demand for the normal period would still stand under the given facts and circumstances. After hearing both sides, the Tribunal found the demand for the extended period of limitation to be invalid and set it aside. However, the demand for the normal period was upheld, directing the appellant to pay under intimation to the jurisdictional authorities. The penalty imposed was also set aside. The Tribunal specifically mentioned that the demand in the show-cause notice related to the appellant's own moulds should be excluded from the overall demand. Consequently, the appeal was allowed by the Tribunal, providing relief to the appellant from the demands and penalties imposed.

In conclusion, the Tribunal's decision centered on the issue of limitation concerning the show-cause notice, ultimately ruling in favor of the appellant by setting aside the demand for the extended period while upholding the demand for the normal period. The judgment also highlighted the exclusion of the appellant's own moulds from the demand mentioned in the show-cause notice.