2011 (12) TMI 31 - HC - Central Excise

Issuance of Show Cause notice - period of limitation - clearance of the mineral water classifiable under CH 2201.90 from 1.4.97 to 15.7.97 without payment of duty - Commissioner found that the show cause notice is time barred and the invokation of the extended period is not applicable to the facts of the case. - Tribunal reversed the decision of Commissioner - Held that - the Apex Court in the judgment in Indian Refrigeration Industries v. Commissioner of Central Excise, Delhi, (2006 -TMI - 77176 - SUPREME COURT) while deciding the issue in favor of assessee, matter remanded back to tribunal for fresh consideration as to whether the extended period of limitation had been correctly invoked by the department or not.

Summary

Issues:
1. Demand of duty beyond the statutory period under the Central Excise Act and Rules.

Analysis:
The case involves the appellant, engaged in mineral water manufacturing, who was found to have received mineral water from another unregistered unit without paying the required duty. A show cause notice was issued for contravention of the Act and Rules due to non-payment of duty and non-compliance with procedures. The Commissioner of Central Excise (Appeals) found the notice to be time-barred, setting aside the order-in-original. The Revenue appealed to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which allowed the appeal on merits, leading to the current civil miscellaneous appeal.

The main issue before the court was whether CESTAT could consider the case on merits despite the Commissioner's finding that the show cause notice was time-barred. Referring to a previous judgment, the court held that a demand cannot be made beyond six months from the due date unless the extended period of limitation is invoked. Since the Commissioner found the extended period inapplicable, CESTAT should not have delved into the merits without the Revenue raising the issue. The court decided in favor of the appellant, emphasizing that the extended limitation period is a mixed question of fact and law, which CESTAT should reconsider. Therefore, the matter was remitted to CESTAT for fresh consideration on the invocation of the extended period, without expressing any opinion on the merits. Consequently, the court allowed the civil miscellaneous appeal and closed the related motion without costs.