2017 (3) TMI 368 - AT - Central Excise

Clearance of diphenoxylate hydrochloride from one unit to another - determination of price under rule 6(b)(ii) of Central Excise Valuation Rules, 1975 - time limitation - Held that - the notice had not brought out any evidence of misdeclaration or suppression of facts with intent to evade duty and a notice of 11th June 2002 cannot, in absence of such evidence, invoke the extended period to demand duty - The notice itself is barred by limitation of time - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Demand of duty under section 11A of Central Excise Act, 1944
2. Failure to demand interest and impose penalty

Analysis:

Issue 1: Demand of duty under section 11A of Central Excise Act, 1944

The case involved M/s RPG Life Sciences Ltd being issued a show cause notice demanding duty under section 11A of Central Excise Act, 1944 for the period from December 1999 to June 2000. The original authority confirmed the demand but did not determine interest liability or impose a penalty. The Revenue was aggrieved by this and argued that interest should be demanded and a penalty should be imposed. The Authorized Representative relied on previous court decisions to support the imposition of a penalty equal to the duty amount under section 11AC of the Act. The argument was also supported by citing relevant legal provisions regarding the mandatory nature of interest payment under section 11AB. The Tribunal analyzed the case law and concluded that the notice lacked evidence of misdeclaration or intent to evade duty, thus invoking the extended period to demand duty was not justified. The Tribunal emphasized that the notice itself was barred by the limitation of time, leading to the dismissal of the appeal.

Issue 2: Failure to demand interest and impose penalty

The failure to demand interest and impose a penalty was a key contention in the case. The Authorized Representative highlighted the legal requirement to impose a penalty equal to the duty amount under section 11AC of the Act. Additionally, the argument was made based on previous court decisions emphasizing the mandatory nature of interest payment under section 11AB. The Tribunal carefully examined the arguments presented and concluded that in the absence of evidence of misdeclaration or intent to evade duty, the notice issued was beyond the scope of the proviso to Section 11A(1) of the Act. Consequently, the Tribunal found the appeal devoid of merits and dismissed it, emphasizing that the notice itself was time-barred.

In conclusion, the judgment addressed the issues of demanding duty under section 11A of the Central Excise Act, 1944, and the failure to demand interest and impose a penalty. The Tribunal's analysis focused on legal precedents, statutory provisions, and the lack of evidence supporting the demand for duty, ultimately leading to the dismissal of the appeal due to the time-barred nature of the notice.