2016 (2) TMI 717 - AT - Central Excise

Recovery of excess amount of rebate sanctioned to the appellant - extended period of limitation invoked - Held that - As the show cause notice has been issued by invoking extended period of limitation without alleging fraud, collusion, willful mis-statement suppression or contravention of any provision of Act or Rules with malafide intention not to pay the duty. Therefore, we hold that show cause notice issued to appellant is barred by limitation. Consequently, the demands are set aside. In these circumstances, the impugned order is set aside, appeal is allowed with consequential relief, if any. - Decided in favour of assessee

Summary

Issues:
Appeal against demand for recovery of excess rebate amount sanctioned under Rule 10 of Central Excise Rules, 1944. Issue of limitation in the show cause notice.

Analysis:
The appellant appealed against the demand for recovery of excess rebate sanctioned under Rule 10 of Central Excise Rules, 1944. The show cause notice was issued invoking the extended period of limitation without alleging any suppression or misstatement by the appellant. The appellant argued that the demand was barred by limitation as the rebate was sanctioned before the notice was issued. The appellant cited a Supreme Court case where a demand was set aside solely on the ground of limitation. On the contrary, the respondent contended that the appellant was not entitled to the excess rebate claim and there was suppression on the part of the appellant, justifying the confirmed demand.

The Tribunal considered the submissions and focused on the issue of limitation raised by the appellant. The show cause notice in question was issued for an extended period without any allegations of fraud, collusion, or willful misstatement against the appellant. Citing a previous Supreme Court decision, the Tribunal emphasized that the notice must specify any alleged acts of commission or omission to extend the limitation period. Since the notice in this case did not mention any such acts, it was deemed time-barred. Therefore, the show cause notice was held to be barred by limitation, and the demands were set aside. Consequently, the impugned order was overturned, and the appeal was allowed with any necessary consequential relief.

In conclusion, the judgment revolved around the issue of limitation in the show cause notice concerning the recovery of excess rebate amount sanctioned to the appellant. The Tribunal ruled in favor of the appellant, emphasizing the necessity for specific allegations in the notice to extend the limitation period. As no such allegations were present in the notice, the demand was considered time-barred, leading to the setting aside of the demands and the allowance of the appeal.