2011 (1) TMI 751 - AT - Central Excise

During material period the appellant was entitled to the benefit of Notification 74/93-CE dated 28.2.1993 in respect of specified goods cleared by them to State Government Corporations or not. - Extended period of Limitation. - Held that - That decision of this Bench denying the benefit of the above Notification to the appellant in respect of the specified goods cleared to various State Government Corporations was accepted by them no appeal having been filed against it. Therefore in the present appeals the appellant is precluded from claiming the benefit of the above Notification and denying duty liability. decided against Assessee. Regarding extended period of Limiation. - Held that - It clearly stated that the exemption would be admissible to specified goods cleared from the manufacturing unit of one department to another department of the State Government. The appellant cannot be heard to say that they believed that the benefit would be admissible also to similar goods cleared to Government Corporations. Therefore it will wilful suppression of facts decided against Assessee.

Issues Involved:
1. Requirement of clearance from the 'Committee on Disputes' for pursuing the appeals.
2. Demand of duty and penalties imposed on the appellant for the period 1997-98 to 1999-00.
3. Demand of duty and penalties imposed on the appellant for the period July 2000 to January 2002.
4. Applicability of SSI exemption notifications.
5. Invocation of the extended period of limitation under Section 11A(1) of the Central Excise Act.
6. Imposition of penalties under Section 11AC and Rule 173Q of the Central Excise Rules.

Issue-wise Detailed Analysis:

1. Requirement of Clearance from the 'Committee on Disputes':
At the outset, the Tribunal debated whether the appellant could pursue the appeals without clearance from the 'Committee on Disputes'. The Tribunal noted that the Supreme Court's judgment in ONGC vs. City & Industrial Development Corporation required such clearance. However, considering the Supreme Court's later view in CCE vs. Bharat Petroleum Corporation Ltd. that the working of the Committee had failed, the Tribunal decided not to wait for clearance from a non-existent Committee. The Tribunal proceeded with the matters, deeming it unjust and unfair to require clearance.

2. Demand of Duty and Penalties for 1997-98 to 1999-00:
Appeal No. E/1670/03 involved a demand of duty of Rs.29,17,879/- for hoists and parts cleared without payment of duty. The show-cause notice alleged intent to evade duty and suppression of facts, invoking the extended period of limitation under Section 11A(1). The appellant argued they were unaware of the procedure and had since complied. The Commissioner rejected the plea for SSI exemption due to lack of evidence and upheld the suppression allegation, confirming the duty demand with interest and imposing penalties under Section 11AC and Rule 173Q.

3. Demand of Duty and Penalties for July 2000 to January 2002:
Appeal No. E/3242/03 involved a demand of duty of Rs.1,72,50,223/- with interest and a penalty of Rs.50 lakhs. The Commissioner noted the appellant's default in fortnightly duty payments and continued non-compliance even after registration. The Tribunal found the appellant's claim for exemption under Notification No.74/93-CE untenable, confirming the duty demand and reducing the penalty to Rs.50,000/-.

4. Applicability of SSI Exemption Notifications:
The appellant's plea for SSI exemption was rejected by the adjudicating authority due to lack of documentary evidence. The Tribunal upheld this rejection, noting no evidence was presented to support the claim.

5. Invocation of Extended Period of Limitation:
The Tribunal examined whether the extended period of limitation was applicable. It cited the Supreme Court's interpretation in Continental Foundation Joint Venture vs. CCE, Chandigarh-I, which required wilful suppression of facts to invoke the extended period. The Tribunal found the appellant's suppression of manufacture and clearance of goods deliberate, justifying the extended period's invocation.

6. Imposition of Penalties:
The Tribunal upheld the penalty under Section 11AC, covering the offence of contravention with intent to evade duty, but set aside the separate penalty under Rule 173Q in Appeal No. E/1670/03. In Appeal No. E/3242/03, the Tribunal reduced the penalty from Rs.50 lakhs to Rs.50,000/-, considering the appellant's partial compliance and lack of mens rea.

Conclusion:
The Tribunal disposed of Appeal No. E/1670/03 by sustaining the duty demand and penalty under Section 11AC, vacating the penalty under Rule 173Q. Appeal No. E/3242/03 was disposed of by affirming the duty demand and reducing the penalty to Rs.50,000/-. In both cases, the duty was to be paid with interest.

← Previous Next →