2017 (2) TMI 1171 - HC - Central Excise

Extended period of limitation - reliance upon the earlier circular subsequent to the amendment in the notification - Evasion of duty - Notification No.10/97-CE dt.01/03/1997 - Held that - If the matter is to rest on the ultimate fact finding conclusion for which the Tribunal is the final fact finding authority, there would not be any question of law which may arise for consideration, since the present appeal has to be limited to question of law only and not on the question of fact, unless there is any perversity in the finding of fact recorded by the Tribunal. In our view, if there was change in the language of the Notification dated 16.03.1995, possibly the matter may stand on a different footing and different consideration. But when the very language is kept intact and there is only addition in the number of units, it cannot be said that the clarification of the Central Board of Customs & Central Excise dated 27.06.1992 referred to herein above shall be wiped off or nullified by the Notification dated 16.03.1995. In view of the above, if the language in the earlier Exemption Notification dated 01.03.1986 and the Exemption Notification dated 16.03.1995 were the same and the instructions issued by the Central Board of Customs & Central Excise would also co-relate. In any case, it cannot be said that there was any suppression or that there was any intention to evade the duty - Appeal dismissed - Decided against the revenue.

Summary

Issues:
1. Whether the demand is barred by limitation due to a bonafide belief and a clarification issued by the Bangalore Commissionerate?
2. Whether the Respondent is entitled to exemption based on a Certificate issued by CSIO or Aeronautic Development Agency?

Analysis:

Issue 1:
The appellant-Revenue filed an appeal questioning the Customs, Excise & Service Tax Appellate Tribunal's (CESTAT) decision on the limitation period. The Tribunal found that only a one-year limitation period applied, not five years, due to the respondent's bonafide belief in claiming exemption. The Tribunal remanded the matter to the Commissioner for further consideration. The appellant argued that the demand notice wrongly assumed a five-year limitation period. The High Court analyzed Section 11-A of The Central Excise Act, distinguishing between limitation periods based on fraud or collusion and other reasons. The Court concluded that the Tribunal's finding on the limitation period was not perverse.

Issue 2:
The Tribunal found that the respondent was entitled to exemption based on certificates signed by CSIO or Aeronautic Development Agency, despite not being signed by the proper officer. The Tribunal also noted that the certificates were verified by the Superintendent. The High Court upheld this decision, emphasizing that no suppression or misdeclaration was proven to invoke a longer limitation period. The Court highlighted that the language in the relevant notifications remained consistent, and the clarification by the Central Board of Customs & Central Excise supported the respondent's claim for exemption. Therefore, the Court dismissed the appeal, ruling in favor of the respondent on both issues.

In conclusion, the High Court dismissed the appeal, upholding the Tribunal's decision on the limitation period and the respondent's entitlement to exemption based on the certificates issued. The Court's detailed analysis of the legal provisions and factual circumstances supported the judgment in favor of the respondent, emphasizing the absence of fraud or intent to evade duty in the case.