2016 (9) TMI 31 - AT - Central Excise

Invokation of extended period of limitation - Demand for the period 21.05.1991 to 24.07.1996 - no suppression of facts or any wilful misrepresentation - utilization of duty-free molasses received under Chapter X procedure in the manufacture of cattle feed as per the declaration - Held that - in all fairness the matter should be remanded back to the adjudicating authority to decide the matter afresh. We find that there are not many documents placed before us although the counsel for the appellant submitted photocopies of the index that was filed by them before this Tribunal in their previous round of litigation. We, accordingly, remand the matter to the adjudicating authority who shall look into all the aspects. It is needless to mention that the learned Commissioner shall pass an order after taking into account all the facts and circumstances of the case. - Appeal allowed by way of remand

Summary

Issues:
1. Remand by High Court to Tribunal for additional evidence and decision on merits.
2. Appellant's contention on limitation and use of duty-free molasses.
3. Department's argument on fictitious bills and non-utilization of molasses.
4. Appellant's reliance on case laws and penalty imposition.
5. Tribunal's decision to remand the matter back to the adjudicating authority.

Analysis:
1. The High Court remanded the matter back to the Tribunal for additional evidence and a decision on merits, following a previous order that set aside the Tribunal's decision. Both parties were directed to adduce additional evidence, and the appellant's petition for admitting additional grounds was allowed.

2. The appellants argued on the aspect of limitation, stating that the demand was time-barred as the show cause notice was issued belatedly. They emphasized the need to read Rule 196 along with Section 11A of the Central Excise Act for limitation rules. The appellant also contended that there was no evidence provided by the department regarding the non-use of molasses for cattle feed.

3. The department contended that the appellants had prepared fictitious bills for rice bran purchases and had not utilized duty-free molasses in their factory for cattle feed production. They argued that the extended period for demand was applicable due to the lack of evidence proving the use of molasses in manufacturing.

4. The appellant relied on various case laws to support their arguments, highlighting that the penalty was dropped in the impugned order, which, according to them, negated the invocation of the extended period. They emphasized the importance of penalty imposition in relation to the extended period.

5. After hearing both sides, the Tribunal decided to remand the matter back to the adjudicating authority for a fresh decision. The Tribunal noted the lack of documents and evidence presented during the hearing and instructed the adjudicating authority to consider all aspects of the case. The appellant was granted a reasonable opportunity to be heard and produce evidence supporting their case before a new decision is made. The appeal was allowed by way of remand for further proceedings.