2018 (5) TMI 1798 - HC - Central Excise

Time Limitation - demand of Central Excise Duty u/s 11A(4) of the CEA, 1944 along with interest thereon in terms of Section 11AA and penalty in terms of Section 11AC - Although by the impugned common order, the Tribunal has remanded the cases to the adjudicating authority for fresh de novo decision on merit, the objection of appellants that the demands were barred by limitation has been rejected on the ground that the department is entitled to the extended period of limitation for raising the demands. Held that - Appeal disposed off with a direction that the assessing authority will examine and decide the cases remanded to it on merit without applying the extended period of limitation as provided under Section 11A of the Central Excise Act, 1944.

Summary

Issues:
1. Whether demands for Central Excise Duty are barred by limitation under Section 11A(4) of the Central Excise Act, 1944?

Analysis:

The High Court of GAUHATI heard a series of appeals involving the same issue of demands for Central Excise Duty and the applicability of limitation under Section 11A(4) of the Central Excise Act, 1944. The appellants had been issued show cause notices regarding the demand for duty, interest, and penalties. The appellants contended that the demands were time-barred, but the respondent rejected their contentions and approved the demands along with penalties. The Customs Excise and Service Tax Appellate Tribunal remanded the cases for fresh decision, rejecting the limitation objection based on the department's entitlement to the extended period of limitation for raising demands. However, the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs issued Circular No.1063/2/2018-CX dated 16.2.2018, stating that the extended period would not be available to the department for raising demands. In light of this, the High Court disposed of the appeals with a direction that the assessing authority should decide the cases on merit without applying the extended period of limitation under Section 11A of the Central Excise Act, 1944.

This judgment clarifies the application of the limitation period under Section 11A(4) of the Central Excise Act, 1944 to demands for Central Excise Duty. It emphasizes that the extended period of limitation would not be available to the department for raising demands, as per the Circular issued by the Government of India. The decision highlights the importance of adhering to statutory provisions and circulars issued by competent authorities in determining the validity of demands and penalties in excise duty cases. The direction provided by the High Court ensures that the assessing authority will re-examine the cases without considering the extended period of limitation, thus upholding the principles of fairness and legal compliance in excise duty matters.