2011 (3) TMI 1434 - HC - Central Excise

Limitation - revenue contended that as a case of suppression of true facts while filing the returns and claiming exemption is made out the period applicable is five years and not one year as wrongly held by the Tribunal - demand is issued on the ground that the exemption is wrongly claimed. The assessee contends that exemption is applicable to the transaction in question whether the assessee was entitled to exemption under the notification is a matter which falls within the phrase determination of rate of duty payable which only the Apex Court is competent to decide in an appeal filed under Section 35L of the Central Excise Act 1944 and the jurisdiction of the High Court is excluded appeal is rejected

Summary

Issues:
Challenge to order by Tribunal on grounds of limitation.

Analysis:
The High Court judgment pertains to an appeal by the revenue challenging a Tribunal order that set aside a demand on the basis of being time-barred. The case involved an assessee, a manufacturer of readymade garments, who had cleared goods availing a specific notification. The revenue contended that the assessee was not entitled to the notification's benefit and issued a demand for duty payment, interest, and penalty. The original authority and the Commissioner upheld the demand, leading to an appeal before the Tribunal, which ruled the demand as time-barred. The revenue argued for a longer limitation period due to suppression of facts, but the Court held that the question of exemption entitlement needed determination first. The Court noted that the issue of exemption falls under the determination of duty rate, reserved for the Apex Court under Section 35L of the Central Excise Act, excluding the High Court's jurisdiction. Consequently, the appeal was rejected, granting the revenue liberty to approach the Apex Court under the specified section for further proceedings.

This judgment highlights the crucial aspect of limitation in tax matters and the significance of determining exemption entitlement before addressing limitation issues. It underscores the jurisdictional boundaries between the High Court and the Apex Court regarding the determination of duty rates under the Central Excise Act. The case serves as a reminder of the procedural requirements and the hierarchy of courts in adjudicating tax disputes, emphasizing the need for a systematic approach to legal challenges in the realm of excise duty.