2010 (7) TMI 706 - HC - Central Excise

Exemption - green leaves - lands in excess of 10 hectares - notifications No. 41/99-C.E., dated 26-11-1999, 13/2003-C.E., dated 1-3-2003 and 42/2003-C.E., dated 14-5-2003 - proviso to sub-section (1) of Section 11A - In the absence of any specific prescription in the notification, the certificates produced by the respondent one of which was issued by a statutory body cannot be held to be a false claim in order to invoke the proviso to Section 11A(1) for rejecting the exemption granted based on the notification by availing the extended period of limitation - Decided in favour of assessee.

Summary

Issues:
Interpretation of Section 11A of the Central Excise Act, 1944 regarding the invocation of the extended period for demanding central excise duty in the absence of suppression of facts and under a bona fide belief.

Analysis:

1. The case involved a dispute regarding the period between April 2000 and February 2005 concerning excise exemptions covered by three notifications. The respondent availed exemption based on these notifications, specifically related to the purchase of green tea leaves from growers with land holdings not exceeding ten hectares.

2. The respondent produced certificates from the Village Administrative Officer, Tea Board, and self-declarations of landowners to support the claim of exemption. The Central Excise Act, under Section 11A, allows for the issuance of a notice within one year in case of non-levy of excise duty, with a provision for an extended period of five years in case of wilful misstatement or suppression of facts.

3. The appellant issued a show cause notice in 2006 alleging that the purchases were made from suppliers with land holdings exceeding ten hectares. The respondent paid the duty but sought a refund, arguing that the proceedings were beyond the time limit under Section 11A(1). The Commissioner rejected the refund claim, leading to an appeal before the Tribunal.

4. The Tribunal, in its order, found in favor of the respondent, stating that there was no wilful suppression or fraudulent claim made to warrant the extended period of limitation under Section 11A(1). The Tribunal considered the certificates issued by the Tea Board and other authorities as sufficient compliance with the exemption requirements.

5. The High Court upheld the Tribunal's decision, emphasizing that the respondent had provided necessary documentation as per the notification requirements. The Court noted that the appellant did not request additional proof at the time of submission and that reliance on certificates from statutory bodies like the Tea Board was reasonable.

6. The Court concluded that there was no basis to invoke the extended period of limitation under Section 11A(1) as there was no evidence of wilful suppression or fraudulent intent on the part of the respondent. The judgment favored the respondent, dismissing the appeal and allowing for future requests for additional documentation as per the notification requirements.

7. The Court clarified that while the appellant could request further details for future exemptions, in this case, the respondent had met the conditions specified in the notification adequately. The judgment affirmed the Tribunal's decision and closed the appeals, emphasizing the importance of compliance with statutory requirements for claiming exemptions.