2012 (12) TMI 350 - AT - Central Excise

Extended Period of limitation invoked - appellant cleared the goods claiming the benefit of exemption notification no 64/95-CE dt. 16.3.1995 - Held that - There is no evidence on record to show that the certificate is procured by the applicant from the Indian Navy by wrong representation or mis-representation as no investigation was conducted by the Revenue from the authority who issued the certificates to the appellant. The applicant also filed a necessary declaration under Rule 173B of the Central Excise Rules, 1944 in respect of the goods in question by claiming the benefit of Notification No. 64/95-CE. Copy of such declaration dt. 25 th September 1997 is produced by the applicant during the arguments. As the revenue was aware that goods in question have been cleared to M/s Mazgaon Dock Ltd. by claiming the benefit of notification, hence, the allegation of suppression with intent to evade payment of duty is not sustainable in the present case - in favour of assessee.

Summary

Issues:
Whether the extended period of limitation is applicable in the case of duty demand for goods cleared under an exemption notification.

Analysis:
The case involved a dispute regarding the invocation of the extended period of limitation for the demand of duty on paints cleared under an exemption notification. The appellant, engaged in manufacturing paints, claimed the benefit of exemption under Notification No. 64/95-CE for goods supplied to M/s. Mazgaon Dock Ltd., allegedly not exclusively for use on Indian Naval ships. The Revenue contended that the appellant willfully misrepresented facts to evade duty payment. The key issue was whether the demand of duty was time-barred.

The appellant argued that they cleared goods under excise invoices, submitted statutory returns, and provided a certificate from the Indian Navy confirming the goods' use on Indian Naval ships. They maintained that the allegation of suppression with intent to evade payment was baseless.

The Revenue relied on Supreme Court precedents to argue that the onus is on the assessee to prove entitlement to exemption benefits and fulfill notification conditions. They contended that the end-use condition precluded the appellant from claiming the time limit defense.

The appellant produced certificates from the Indian Navy at each clearance, indicating the goods' use on Indian Naval ships. The absence of evidence showing misrepresentation in obtaining the certificates supported the appellant's position that the extended period of limitation was not applicable.

The Tribunal found that the appellant had cleared goods under the exemption notification, provided necessary declarations, and produced certificates from the Indian Navy. As the Revenue was aware of the goods' destination and the appellant's compliance with notification requirements, the allegation of suppression to evade duty was unsustainable. The majority decision concluded that the demand was time-barred, leading to the appeal's allowance with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the extended period of limitation was not invocable in this case, thereby barring the demand for duty on the cleared goods under the exemption notification.