2011 (3) TMI 789 - HC - Central Excise

Extended period of limitation - Suppression of facts - in the present appeal the matter is of non-payment of duty in respect of goods cleared without following the provisions central excise of Act & Rules - It cannot be presumed that they were not aware that they were required to clear the goods under C.Ex. invoice and only after payment of duty - held that - Simply by stating that facts were within the knowledge of the Revenue and if there was any dispute about correct assessable value, same should have been raised within period of limitation in our opinion would not be sufficient to reverse the findings of the Commissioner. From the recorded portion of the Commissioner, it can be seen that he was of the opinion that assessee had clandestinely removed certain goods. Tribunal in our opinion did not address to this aspect of the matter and proceeded on question of valuation of goods and duty liability which question was not germane. - Matter remanded back to tribunal

Issues:
1. Appeal challenging Tribunal's judgment on limitation issue
2. Interpretation of Section 11A of the Central Excise Act
3. Application of extended period of limitation
4. Reversal of Commissioner's order by the Tribunal
5. Consideration of Division Bench judgment on limitation period

Analysis:

1. The appeal before the High Court challenged the Tribunal's judgment on the issue of limitation. The Revenue raised questions regarding the Tribunal's decision on the point of limitation, specifically questioning whether the Tribunal erred in allowing the appeal of the respondent based on limitation issues. The High Court was tasked with considering substantial questions of law framed by the Revenue.

2. The issue at hand pertained to the interpretation of Section 11A of the Central Excise Act concerning the extended period of limitation. The case involved an assessee who was issued a show cause notice alleging clandestine removal of goods to a sister concern, leading to a demand for duty, interest, and payment. The assessee contended that the extended period should not be invoked as there was no suppression of material facts.

3. The Commissioner of Central Excise, in the original order, rejected the assessee's contention and invoked the extended period of limitation under Section 11A. The Commissioner's decision was based on the premise that the revenue-neutral situation might not arise when credit is available to the assessee other than himself. The Commissioner's order was subsequently reversed by the Tribunal, which held that the appeal should be allowed on the point of limitation.

4. The Tribunal's decision to reverse the Commissioner's order was based on the fact that duty had been paid by the appellant, and any dispute about the assessable value could have been raised within the normal period of limitation. The Tribunal noted that the facts were within the knowledge of the Revenue, and the show cause notice was issued beyond the normal period of limitation.

5. The High Court considered a Division Bench judgment on the extended period of limitation under Section 11A of the Central Excise Act. While the ratio laid down in the Division Bench judgment might not directly apply to the present case, the High Court found that the Tribunal had not adequately addressed the issue of clandestine removal by the assessee. Consequently, the High Court quashed the order dated 1-10-2008 and remanded the proceedings to the Tribunal for fresh consideration on whether the conditions under the proviso to Section 11A were satisfied for invoking the extended period of limitation.

In conclusion, the High Court disposed of the tax appeal with directions for the Tribunal to reexamine the issue of limitation under Section 11A of the Central Excise Act in light of the considerations outlined in the judgment.

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