2011 (1) TMI 106 - AT - Central Excise

Waiver of pre-deposit - extended period of limitation demand of duty and interest thereon denial of the benefit of Notification No.30/04-CE - allegation of suppression of facts with intent to evade payment of duty - relevant invoices clearly declared that the assessee was claiming the benefit of Notification 30/04-CE - no material fact was suppressed before the department, let alone with intent to evade payment of duty - extended period of limitation was not applicable - order set aside and appeal allowed by way of remand to the ld.Commissioner(Appeals) to decide on all the issues afresh

Summary

Issues Involved:
Waiver of pre-deposit under Sec.11A of the Central Excise Act, denial of benefit of Notification No.30/2004-CE, imposition of interest and penalties, serious allegations of suppression of facts, plea of limitation, remand to lower appellate authority, consideration of relevant case law.

Detailed Analysis:

1. Waiver of Pre-deposit:
The applicant sought waiver of pre-deposit of Rs. 82,67,354 demanded under Sec.11A of the Central Excise Act. The appellant had availed full exemption under Notification No.30/2004-CE for their final product, Terry Towel, with the condition of not availing CENVAT credit on inputs. The department issued show-cause notices for recovery of duty, interest under Sec.11AB, and penalties under Sec.11AC. The adjudicating authority dropped these proposals, but the Revenue appealed. The Commissioner (Appeals) allowed the appeal without quantifying any demand or imposing penalties.

2. Denial of Benefit and Allegations:
The appellant claimed compliance with the Notification condition based on a report by the Central Excise Range Supdt. The appellant argued that no credit on yarn was taken, and credits on other inputs were proportionately reversed. The appellant cited the High Court's judgment in a similar case. The Tribunal found serious infirmities in the lower appellate order, as it did not address the serious allegations, including suppression of facts, and imposition of penalties. The plea of limitation was also not examined, leading to a decision for remand.

3. Suppression of Facts and Limitation:
The Tribunal noted that the appellant regularly filed returns disclosing relevant facts to the department, indicating no intent to evade duty. The plea of limitation was not considered by the lower appellate authority, despite the appellant's submissions. The Tribunal found that no material fact was suppressed and that the extended period of limitation might not be applicable, necessitating a remand for a fresh decision.

4. Consideration of Case Law:
The Tribunal observed that the lower appellate authority did not have the benefit of the case law cited by the appellant, as it was not available at the time of the impugned order. The Tribunal set aside the order and remanded the case for a fresh decision by the Commissioner (Appeals), allowing both parties a reasonable opportunity to present their case.

5. Conclusion:
The Tribunal set aside the impugned order and remanded the case for a fresh decision on all issues, emphasizing the need for a thorough examination and consideration of all relevant aspects. The stay application was also disposed of in light of the remand decision.