2008 (10) TMI 161 - AT - Central Excise

Tribunal in impugned order has held that classification list was filed on 4-4-1994 and, therefore, demand for the period 4-4-1994 to 30-9-1994 is barred by limitation as the SCN was issued on 31-3-1995 - applicants never brought to the notice of the Department about the manufacture of crayplas compound - Bona fide belief is not blind belief - submissions of the Revenue that relevant date is date of filing of return - For monthly return of September, 1994, the relevant date was 5-10-1994 and the SCN was issued within six months from that date. Therefore, the demand for the period September, 1994 was not barred by limitation - ROM application filed by the Revenue is allowed

Summary

Issues:
1. Upholding demand of duty based on Supreme Court judgment
2. Limitation period for duty demand for the period 1-4-1990 to 3-4-1994
3. Application of extended period for duty demand
4. Bona fide belief as a defense against duty demand
5. Revenue's contention on limitation period for duty demand for the period 4-4-1994 to 30-9-1994

Analysis:

1. The Tribunal upheld the demand of duty based on a Supreme Court judgment in the appellant's own case. The Modvat credit was allowed, and it was determined that the demand for the period 1-10-1994 to 31-3-1995 fell within the normal period. However, for the period from 1-4-1990 to 3-4-1994, the extended period was deemed rightly invoked by the Commissioner.

2. The Tribunal's order for the period 1-4-1990 to 3-4-1994 was based on findings that the applicants failed to declare the manufacture and clearance of a specific compound, despite seeking permission for other goods. The case laws cited were deemed inapplicable to the case.

3. The applicants contended that the demand for the period prior to six months from the show cause notice date was time-barred. They argued that various propositions were made to support their claim, including the belief that permission for certain activities was not required based on past clarifications and classification lists.

4. The Tribunal found that the applicants did not seek clarification for the specific compound in question and that the extended period was justifiably invoked due to the lack of communication from the applicants. The Tribunal dismissed the argument of bona fide belief, citing relevant case laws and emphasizing that a bona fide belief must be based on reasonable considerations.

5. The Revenue filed a ROM application contending that the demand for the period 4-4-1994 to 30-9-1994 was not time-barred. They argued that the extended period could not be invoked after the Department became aware of certain filings. The Tribunal agreed with the Revenue's submissions, holding that the demand for September 1994 was not barred by limitation, as it fell within the statutory timeline for serving notices under the Central Excise Act.

In conclusion, the Tribunal upheld the duty demand for the specified periods, emphasizing the importance of timely disclosures and communication with the authorities to avoid time-barred claims.