2017 (2) TMI 1142 - AT - Central Excise

Time limitation - area based exemption - for the period March, 2010 to October, 2011, the show cause notice has been issued by invoking extended period of limitation i.e. on 30.11.2012 - whether the facts and circumstances of the case, the extended period of limitation is invokable or not? - Held that - The declaration given by the assessee were examined and the Range Superintendent held that the appellant is entitled for exemption under N/N. 50/2003 ibid. In that circumstances, it cannot be said that the appellant has suppressed the fact of manufacturing of Red Oxide from the department. Therefore, the change of suppression of facts is not sustainable against the appellant - the SCN is not maintainable which has been issued by invoking extended period of limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of benefit of exemption under Notification No. 50/2003-CE.
2. Manufacturing of Red Oxide without declaration.
3. Invocation of extended period of limitation for demand of duty.

Analysis:
1. The appellant appealed against the denial of exemption under Notification No. 50/2003-CE. The appellant, engaged in manufacturing specified goods, had initially availed the exemption after providing necessary documents. However, an investigation revealed the manufacturing of Red Oxide, not covered under the exemption. This led to a show cause notice for duty demand, interest, and penalty. The appellant contested the denial of exemption in the appeal.

2. The appellant argued that the demand was time-barred as the show cause notice was issued beyond the limitation period. The appellant had filed a declaration for exemption, including details of the manufacturing process where Red Oxide emerged as an intermediate product. The appellant contended that since the manufacturing process was disclosed, the demand was barred by limitation. The respondent, however, claimed that the appellant had not explicitly informed the department about the production of Red Oxide, alleging suppression of facts.

3. The Tribunal considered whether the extended period of limitation was applicable based on the facts of the case. Upon reviewing the manufacturing process declaration submitted by the appellant, it was evident that Red Oxide was produced during the manufacturing of final goods. The Tribunal found that the appellant had not concealed the production of Red Oxide as it was disclosed in the manufacturing process details provided earlier. Consequently, the Tribunal held that the demands against the appellant were time-barred, setting aside the impugned order and allowing the appeal with any consequential relief.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's decision based on the disclosure of manufacturing processes and the applicability of the extended period of limitation.