2011 (9) TMI 356 - HC - Central Excise

Recovery of demand notice after 1 year from the date of assessment of the duty payable - Held that -Act does not stipulate the period of limitation within which the demand notice is to be issued, Section 11-A(1) stipulates the period of limitation for the purpose of issuance of show cause notice,where show cause notice were issued well in time and notice of demand were received later on. Such demand notice were held to be valid. Period of limitation for recovery of the amount due - proceeding for recovery of the amount after expiry of 3 (three) years. - Held that - the provision of the 1963 Act does not apply to the proceeding under the Act and it applies to the suit or other proceeding, as contemplated by the 1963 Act. - Decided against the assessee.

Summary

Issues:
Challenging a notice issued by the Assistant Commissioner for payment of excise duty beyond the prescribed period of limitation under the Central Excise Act, 1944 and the Limitation Act, 1963.

Analysis:
The petitioner contested the notice dated 22nd January, 2008, demanding payment of excise duty, arguing that it was issued after the expiry of the prescribed time limit for such demands. The petitioner claimed that the assessment was made on 17th January, 2001, and any demand notice issued after 16th January, 2002, would be invalid as per Section 11-A(1) of the Act. Additionally, the petitioner argued that no recovery proceeding could be initiated after 17th January, 2007, due to the 3-year limitation period under the 1963 Act. The petitioner sought interference with the notice issued by the Assistant Commissioner.

The Central Government Counsel representing the respondents countered the petitioner's claims by asserting that there is no specific limitation period for issuing demand notices under Section 11-A(1) of the Act. The counsel highlighted that show cause notices were issued within the prescribed time limits, and subsequent actions were taken in accordance with the law. It was argued that the provisions of the 1963 Act do not apply to proceedings under the Excise Act, as they are relevant to suits or other legal actions.

Upon reviewing the arguments and pleadings, the court found that the show cause notices were issued within the stipulated time frame as required by Section 11-A(1) of the Act. The court clarified that the 1-year period mentioned in Section 11-A(1) pertains to show cause notices, not demand notices. As there is no specific time limit for issuing demand notices under the Act, the challenge based on the timing of the notice was dismissed.

Regarding the petitioner's argument on the 3-year limitation period under the 1963 Act, the court reiterated that such limitations do not apply to proceedings under the Excise Act. Consequently, the court concluded that there was no merit in the writ petition and dismissed it, vacating any interim orders previously issued.