2017 (1) TMI 601 - AT - Central Excise

Job-work - N/N. 214/86-CE - excise duty not discharged on supply of inputs - time limitation - Held that - it is apparent from the records that show-cause notice for the period 20/07/2000 to 18/08/2000 was issued on 06/05/2002, i.e. much after one year of the transaction of the goods. As per the above correspondence, since there is no suppression of facts on the part of the appellant, the extended period of demand was wrongly invoked. Therefore, the demand is not sustainable on the ground of limitation itself - appeal allowed - decided in favor of appellant.

Summary

Issues:
Violation of Notification No. 214/86-CE and duty liability on processed BQ plates; Whether bending of BQ plates amounts to manufacture and duty liability; Liability of duty on principal supplier of raw materials; Timeliness of the show-cause notice; Suppression of facts; Modvat Credit adjustment.

Violation of Notification No. 214/86-CE and duty liability on processed BQ plates:
The appellant was engaged in job work and had received BQ plates for processing without payment of duty under Notification No. 214/86. The issue arose when the processed goods were used by the principal unit without discharging excise duty, leading to a show-cause notice for violation of the notification. The Commissioner (Appeals) upheld the demand, prompting the appellant to appeal.

Whether bending of BQ plates amounts to manufacture and duty liability:
The appellant argued that bending BQ plates did not constitute manufacture, hence no excise duty was payable. Additionally, they contended that if any duty liability existed, it should fall on the principal supplier of raw materials, not on them as the job worker.

Timeliness of the show-cause notice and Suppression of facts:
The appellant highlighted that they had duly informed the jurisdictional authorities about their job work activities and material supplies. They argued that the show-cause notice issued after the stipulated one-year period was time-barred, as there was no suppression of facts on their part. The Tribunal agreed, stating that the demand was not sustainable due to the delayed issuance of the notice.

Modvat Credit adjustment:
The appellant also raised the issue of adjusting Modvat Credit to reduce the duty liability. They cited a previous order where Cenvat Credit on inputs was allowed, suggesting that the demand should be recalculated considering the credit available to them.

The Tribunal, after reviewing the correspondence between the appellant and the authorities, found that the entire process and disclosures were made in a timely manner. Since the show-cause notice was issued well beyond the prescribed period and there was no suppression of facts, the demand was deemed unsustainable on the grounds of limitation alone. Consequently, the impugned order was set aside, and the appeal was allowed solely on the basis of the limitation issue without delving into the merits of the case.