2019 (7) TMI 1800 - AT - Central Excise

Benefit of Notification No. 74/1993-CE dt. 28.2.1993 - PC Pole manufactured in the factories owned by the State Government - benefit to Electricity Board which is not a department of State Government - Time limitation - penalty - HELD THAT - The issue is no more res integara and covered by the judgment of Larger Bench of Tribunal in the case ASSTT. ENGINEER (CIVIL) VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR 2008 (9) TMI 105 - CESTAT NEW DELHI . Analyzing the principle of law on the subject, it has been held that the Electricity Board is not a department of State Government, consequently, benefit of the said exemption Notification cannot be extended. Time Limitation - penalty - HELD THAT - In the present case initially the appellant had been paying duty at the appropriate rate albeit under protest but stopped making payment w.e.f. 15.7.2007 after the decision of the Tribunal was passed in their favour. From the records, it is not found that any protective demands were issued by the department nor any letter directing the appellant to discharge duty had been issued after 15.7.2007. It cannot be disputed that conflicting views was prevailing on the issue, therefore, it necessitated reference to the Larger Bench - Also, the issue involved is since centres around interpretation of law, hence, invoking of larger period of limitation cannot be sustained. Therefore the demand raised post 15.7.2007 should be restricted to normal period of limitation. - penalty also set aside. Appeal disposed off.

Summary

Issues:
1. Entitlement to benefit of Notification No. 74/1993-CE dt. 28.2.1993
2. Bar of limitation for the demand

Entitlement to benefit of Notification No. 74/1993-CE dt. 28.2.1993:
The appellant, engaged in manufacturing PC Poles, claimed exemption from duty under Notification No. 74/93-CE dt. 28.2.1993. The issue arose when the department demanded duty for the period from 16th July 2007 to March 2009, despite the Tribunal's order in the appellant's favor on 16.4.2007. The Tribunal held that the Electricity Board, not being a department of the State Government, is not entitled to the exemption under the said notification. The Larger Bench decision clarified that the benefit of the exemption cannot be extended to entities outside the State Government. The appellant discontinued duty payment only after the Tribunal's order, and the demand invoking the extended period of limitation was deemed unsustainable.

Bar of limitation for the demand:
The appellant argued that they informed the department about non-payment of duty post the Tribunal's order, but no demand notice was issued. The appellant had paid duty under protest until the Tribunal's decision in their favor on 16.4.2007. They stopped discharging duty from 15.7.2007 after intimating the department. The Tribunal found that conflicting views on the issue necessitated reference to the Larger Bench, and no protective demands were issued by the department post 15.7.2007. As the issue revolved around the interpretation of law, the invocation of an extended period of limitation was deemed unsustainable. The demand post 15.7.2007 was restricted to the normal period, and the penalty imposed on the appellant was set aside as the issue pertained to the interpretation of law and the Tribunal's judgment favored the appellant.

In conclusion, the appeal was disposed of accordingly, with the Tribunal ruling in favor of the appellant on both issues of entitlement to the benefit of the notification and the bar of limitation for the demand.