2017 (1) TMI 535 - AT - Central Excise

Valuation - demand of duty on clearance value - time limitation - Held that - it is clear that the entire fact of removal of input as such and the duty payable on the same was declared by the appellant. However, the show-cause notice was issued belatedly on 21/01/2003, i.e. after the stipulated time period of one year provided under Section 11A (1). Since there is no suppression of facts on the part of the appellant, the entire show-cause notice is time barred - appeal allowed on grounds of limitation - decided in favor of assessee.

Summary

Issues:
- Interpretation of Rule 57AB of Central Excise Rules, 1944 regarding payment of excise duty on clearance value of input as such.
- Applicability of the Tribunal decision in the appellant's own case and subsequent amendments to Rule 57AB.
- Time limitation for issuing show-cause notice and imposition of penalty and interest.

Analysis:

Issue 1: Interpretation of Rule 57AB
The appellant, engaged in manufacturing tractors, availed Cenvat Credit under Rule 57AB of Central Excise Rules, 1944. The department contended that excise duty should have been paid on the clearance value of input as such during the relevant period under Rule 57AB. The adjudicating authority initially dropped the proceedings, citing settled issues based on previous judgments. However, the Commissioner (Appeals) reversed this decision, emphasizing the amended Rule 57AB effective from 01/04/2000, requiring duty payment on the clearance value of input as such. The appellant challenged this decision, leading to the present appeal.

Issue 2: Applicability of Tribunal Decision and Amendments
The appellant argued that they had already paid duty based on a Tribunal decision in their own case and Commissioner (Appeals) order. They contended that the penalty and interest demanded were unjustified. The appellant highlighted that they had informed the department about their activities and intention to discharge duty, indicating no suppression of facts. The Tribunal noted the appellant's timely declarations and found the show-cause notice issued on 21/01/2003 to be beyond the one-year limitation under Section 11A (1). Consequently, the Tribunal set aside the impugned order solely on the ground of time limitation, without delving into the case's merits.

Issue 3: Time Limitation for Show-Cause Notice
The Revenue reiterated the findings of the impugned order, emphasizing the duty payment requirements under Rule 57AB. However, the Tribunal focused on the timeliness of the show-cause notice, determining that the notice was issued after the statutory one-year period, rendering it time-barred due to the absence of any suppression of facts by the appellant. As a result, the Tribunal allowed the appeal solely on the basis of time limitation, without addressing the substantive merits of the case.

In conclusion, the Tribunal's judgment primarily revolved around the time limitation for issuing the show-cause notice, finding it to be beyond the statutory period and therefore time-barred. The decision highlights the importance of adherence to procedural requirements in excise duty matters, emphasizing the significance of timely actions and declarations by the parties involved.