2011 (5) TMI 491 - AT - Central Excise

Demand of duty - Limitation - Merely because the fact of charging more freight was not being disclosed to the Revenue, by itself cannot be taken as a ground for invoking the longer period of limitation unless any evidence to reflect upon the assessee s malafide is brought on record. In the absence of any such evidence, the extended period has been rightly held has not invoked as not against the respondent.

Issues:
1. Excess transportation charges recovery and its impact on assessable value.
2. Barred by limitation - extended period for duty demand.
3. Application of Supreme Court judgments on similar issues.
4. Revenue's contention on suppression of facts and duty liability.
5. Applicability of previous judgments on the current case.
6. Assessment of malafide intent for invoking extended period of limitation.

Analysis:

Issue 1: Excess transportation charges recovery and assessable value
The case involved a demand of duty against the respondents for recovering excess transportation charges from customers during a specific period. The original adjudicating authority confirmed the demand, but the Commissioner (Appeals) set it aside, citing that excess transportation charges are not to be added to the assessable value if not connected with manufacturing activity. The judgment referred to the Supreme Court's decision in the Baroda Electric Meter case to support this reasoning.

Issue 2: Barred by limitation - extended period for duty demand
The Commissioner (Appeals) also held that the demand for the specified period was barred by limitation, as the duty demand notice was issued after a significant delay. The judgment referenced the Supreme Court's decision in the Padmini Product case to establish that the extended period of limitation does not apply without evidence of willful misstatement, suppression of facts, fraud, or collusion.

Issue 3: Application of Supreme Court judgments on similar issues
The Revenue contended that the Baroda Electric Meter case's law should not apply due to a pending matter regarding the same issue in the Majestic Auto Ltd. case before the Supreme Court. However, the Tribunal upheld the Commissioner (Appeals) decision, emphasizing the consistency with the Baroda Electric Meter case.

Issue 4: Revenue's contention on suppression of facts and duty liability
The Revenue argued that the excess freight charges were not disclosed to evade duty liability, justifying the inclusion of suppression of facts in the notice. However, the Tribunal dismissed the Revenue's appeal, citing the Supreme Court's judgment in the CCE Meerut Vs. Majestic Auto Ltd. case, which reiterated the Baroda Electric Meter decision.

Issue 5: Applicability of previous judgments on the current case
The Tribunal found no infirmity in the Commissioner (Appeals) decision on the merits, aligning with the Supreme Court's dismissal of the Revenue's appeal based on previous judgments. The Tribunal emphasized the need for clarity in the factual and legal basis of the original assessment order.

Issue 6: Assessment of malafide intent for invoking extended period of limitation
The Tribunal agreed with the Commissioner (Appeals) on the limitation aspect, highlighting that non-disclosure of charging more freight alone is insufficient to invoke the extended period of limitation without evidence of malafide intent. The absence of such evidence led to the rejection of the Revenue's appeal.

In conclusion, the Tribunal rejected the Revenue's appeal, maintaining the Commissioner (Appeals) decision on both the assessable value issue and the limitation aspect, emphasizing the importance of evidence in invoking the extended period of limitation.

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