2018 (12) TMI 1750 - AT - Central Excise

Benefit of N/N. 214/86 dated 25.03.1986 - Wrongful availment of exemption benefit - parts of boilers were cleared from the factory by describing the same as Boilers in parts - N/N. 3/2001 dated 01.03.2001 and 6/2002 dated 01.03.2002 - extended period of limitation - HELD THAT - The show cause notice dated 27.06.2005 issued to the appellant in the present case had enclosed the annexure mentioning the details of projects executed by the appellant. On examination of the earlier show cause notice dated 30.03.2005 we find that the same projects were also involved therein for whom the appellant had executed the assigned job. Since the adjudication order passed in confirming the proposed duty demand in the said notice dated 30.03.2005 was set aside by the Tribunal it cannot be said that the department is justified in invoking the extended period of limitation for confirmation of the adjudged demands in the present case. The charges of suppression wilful misstatement etc. cannot be levelled against the appellant justifying issuance of show cause notice beyond the normal period provided under Section 11A ibid. The impugned order upholding confirmation of the adjudged demand beyond the normal period of limitation cannot be sustained - the appeal is allowed in favour of the appellant on the ground of limitation alone.

Summary

Issues:
Claim of benefit under Notification Nos. 3/2001 and 6/2002 - Barred by limitation of time.

Detailed Analysis:

Issue 1: Claim of benefit under Notification Nos. 3/2001 and 6/2002 - Barred by limitation of time
The appellant, engaged in manufacturing boilers, faced a dispute regarding wrongly availing exemption benefits under Notification Nos. 3/2001 and 6/2002. The department alleged that parts of boilers were cleared incorrectly as "Boilers in parts." A show cause notice was issued in 2005, questioning the exemption claimed under Notification No. 214/86 and proposing duty recovery and penalties. The matter was adjudicated in 2005, confirming the demands. The appellant appealed, arguing that a similar issue had been resolved in their favor by the Tribunal in 2017, citing the limitation period under Section 11A of the Central Excise Act. The Tribunal in 2017 had allowed the appeal, stating that the benefit of the notifications should be available to the appellant and that suppression of facts could not be alleged. The projects in question were the same as in the previous dispute. The Tribunal found that the department was not justified in invoking the extended period of limitation due to the earlier order setting aside the duty demand proposed in 2005. Therefore, the charges of suppression and wilful misstatement could not be upheld, leading to the appeal being allowed in favor of the appellant based on the limitation ground alone.

In conclusion, the Tribunal held that the impugned order upholding the confirmed demand beyond the normal period of limitation could not be sustained. The appeal was allowed in favor of the appellant on the ground of limitation alone.