2011 (2) TMI 556 - AT - Central Excise

Waiver of pre-deposit - Time barred - advance licences surrendered - Revenue neutral - As the adjudicating authority has observed that there was no provision for providing the information for duty free import of raw material the non-providing of such information by the appellant cannot be held to be a justifiable ground of invoking longer period unless there is evidence for such non-disclosure on account of any mala fide - The revenue neutrality aspect was considered by the Tribunal in the case of M/s. Reliance Industries and by majority order as reported in (2009 -TMI - 75546 - CESTAT AHMEDABAD) it was held in favour of the assessee

Summary

Issues:
Prayer to dispense with pre-deposit of confirmed duty and penalty under Section 11AC of Central Excise Act, 1944.
1. Limitation Issue:
The demand for duty and penalty was challenged on the grounds of limitation. The appellant argued that the demand was time-barred, citing the absence of provisions in the prescribed format to furnish details about duty-free imports of raw materials. The adjudicating authority invoked the extended period of 5 years under proviso to Section 11A(1) based on the appellant's alleged intention to evade duty. However, the Tribunal found that the reasons given by the authority did not align with the guidelines set by the Supreme Court for invoking a longer limitation period. It was noted that the non-provision of information on duty-free imports cannot be a valid reason for extending the limitation period unless there is evidence of mala fide intent. The Tribunal, referring to a Supreme Court judgment, concluded that there might have been a bona fide reason for the appellant not considering the additional consideration from duty-free imports, thus holding the demand as hit by the bar of limitation.

2. Revenue Neutrality Issue:
The issue of revenue neutrality was raised, arguing that the subject clearances were fully exempted under a specific notification and refund of terminal excise duty was available. The adjudicating authority disagreed, stating that since the seller and buyer chose to clear the goods by paying duty, they forfeited the option of duty-free clearance under the notification. The Tribunal, however, found in favor of the appellant on the revenue neutrality aspect, citing a previous case where a similar argument was upheld. Consequently, the Tribunal agreed with the appellant on the issue of revenue neutrality.

In conclusion, the Tribunal allowed the stay petition unconditionally, dispensing with the pre-deposit condition of the balance amount of duty and the entire penalty. The decision was based on the finding that the demand was hit by the bar of limitation and that the revenue neutrality argument favored the appellant.