2019 (7) TMI 1820 - AT - Central Excise

Validity of Suo-motu duty adjustment of excess duty paid - month of March 2013 - whether demand of central excise duty is sustainable for the period May 2013 inasmuch as duty liability has been paid by way of suo-moto adjustment of said excess duty payment in the month of March 2013? - time limitation - HELD THAT - The case of the appellant can be decided on the ground of limitation alone inasmuch as the period in dispute is May 2013 for which the SCN has been issued in February 2017 by invoking extended period of limitation. The fact regarding the adjustment of excess duty was always in the knowledge of the department in view of the reason that adequate disclosures were duly made in the ER-1 returns field with the department. It cannot be said that there was any suppression on the part of the assessee. Further, on perusal of the entire Show Cause Notice, except the mere allegation of suppression to invoke extended period of limitation, there are no specific charge against the assessee for willful suppression of any information from the Department. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand of central excise duty on account of suo-motu duty adjustment of excess duty paid in March 2013 upheld by lower authorities - Appeal challenging the demand and penalty - Merits of the case and limitation aspect in dispute.

Analysis:

Issue 1: Merits of the Case
The appellant, engaged in coal production and sales, adjusted excess duty paid in March 2013 against short payment in May 2013. The authorities confirmed demand, penalty, and interest for not applying for a refund. The appellant argued that the adjustment was valid based on judicial precedents allowing such actions. The appellant also contended that proper disclosures were made, and there was no intention to evade tax. The appellant relied on tribunal decisions to challenge the larger bench decision cited by the authorities.

Issue 2: Limitation Aspect
The appellant raised the issue of limitation, arguing that disclosures were made in the ER-1 return for May 2013, and any dispute should have been raised within the normal time limit. The appellant claimed that since the department was aware of the excess duty adjustment, there was no suppression, and the extended period of limitation was not justified. The Revenue, however, supported the lower authorities' findings, citing the larger bench decision as settled law.

Judgment:
The Tribunal, after hearing both sides, focused on the limitation aspect. The Tribunal found that the period in dispute was May 2013, and the show cause notice issued in February 2017 invoked the extended period of limitation. The Tribunal noted that the department was aware of the excess duty adjustment due to proper disclosures. Finding no willful suppression by the appellant, the Tribunal allowed the appeal on the ground of limitation alone. Consequently, the demand of duty, interest, and penalty were set aside, and the appeal was allowed with consequential relief as per law.