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2009 (5) TMI 13 - SC - Central ExciseSCN issued proposing demand and penalty - exemption under Notification No.202/88 - If on the materials produced by the parties, the Tribunal had arrived at a finding of fact that there had been no suppression on the part of the appellant after 22nd January, 1991, the question of invoking the extended period of jurisdiction did not arise - SCN dated 28th March, 1994 issued after the expiry of the period prescribed u/s 11A, was clearly barred by limitation - whether a party is guilty of suppression of fact or not is essentially a question of fact. It does not per se give rise to substantial question of law per se.
Issues Involved:
1. Maintainability of the Reference under Section 35-G of the Central Excise Act. 2. Applicability of the extended period of limitation under Section 11-A of the Central Excise Act. Detailed Analysis: 1. Maintainability of the Reference under Section 35-G of the Central Excise Act: The first issue concerns whether the Reference made by the Commissioner of Central Excise to the High Court under Section 35-G of the Central Excise Act was maintainable. The judgment highlights that the High Court treated the Reference as an appeal under the amended Section 35-G of the Central Excise Act, which was incorrect. The provision for a Reference was substituted by Section 144 of the Finance Act, 2003, which provides for an appeal on a substantial question of law. The High Court failed to recognize the amendment and erroneously proceeded under the old provision. The Supreme Court clarified that an appeal under the amended Section 35-G requires the High Court to formulate a substantial question of law, which was not done in this case. Therefore, the Reference was not maintainable under the amended provisions. 2. Applicability of the Extended Period of Limitation under Section 11-A of the Central Excise Act: The second issue pertains to whether the extended period of limitation was applicable in this case. The Commissioner of Central Excise had issued a show cause notice on 28th March 1994, demanding Central Excise Duty and alleging suppression of facts by the appellant to evade duty. The Tribunal found that the suppression of facts ceased on 22nd January 1991, when the appellant informed the Central Excise Department about its manufacturing activities and exemption claim. The Tribunal held that the extended period of limitation could only apply to the period before 22nd January 1991. The High Court, however, disagreed and treated the non-furnishing of information as willful suppression, extending the limitation period. The Supreme Court emphasized that whether non-furnishing of information constitutes willful suppression is a question of fact, not a substantial question of law. The Tribunal's finding that there was no suppression after 22nd January 1991 was based on factual evidence, including inspections conducted by Central Excise officers. The Supreme Court held that the extended period of limitation could not be invoked as the show cause notice was issued after the prescribed period under Section 11-A of the Act. Consequently, the demand was barred by limitation. Conclusion: The Supreme Court set aside the High Court's judgment, ruling that the Reference was not maintainable under the amended Section 35-G of the Central Excise Act. Additionally, the Court held that the extended period of limitation could not be applied as the Tribunal's factual finding of no suppression after 22nd January 1991 was binding. The appeal was allowed with costs assessed at Rs. 10,000/-.
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