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2017 (8) TMI 825 - HC - Central ExciseValidity of SCN - Time limitation - whether notice was issued within the period of limitation? - Held that - Section 11A(3) of the Central Excise Act, 1944 provides limitation of one year to the Central Excise Officer to issue notice to the assessee. However sub-section (4) provides that when there is fraud; collusion; any wilful misstatement; suppression of fact and contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the period of limitation will be five years. The assessee has not misstated any fact; the assessee has not suppressed any facts. The assessee may have been guilty of claiming wrong Cenvat credit but as pointed out by the CESTAT, there continues to be divergence of opinion with regard to the issue whether Cenvat credit can be claimed on such inputs or not. Therefore, it cannot be said to be a fraudulent claim or a claim which has an aspect of dishonesty attached to it. In this view of the matter, limitation would only be one year. Appeal dismissed.
Issues:
1. Whether the notice issued to the assessee is within the period of limitation? 2. Interpretation of Section 11A(3) and (4) of the Central Excise Act, 1944 regarding limitation for issuing notice to the assessee. Issue 1: Whether the notice issued to the assessee is within the period of limitation? The appeal was directed against the orders of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) which held that the notice issued to the assessee, a manufacturer of Sponge Iron claiming Cenvat credit on structural items, was beyond the period of limitation and consequently quashed the same. The notice in question was issued on 7-7-2008 for the assessment relating to the years 2004-2008. The key question was whether the notice was issued within the period of limitation as per Section 11A(3) of the Central Excise Act, 1944. Issue 2: Interpretation of Section 11A(3) and (4) of the Central Excise Act, 1944 regarding limitation for issuing notice to the assessee Section 11A(3) of the Central Excise Act, 1944 provides a limitation of one year for the Central Excise Officer to issue a notice to the assessee. However, sub-section (4) extends this period to five years in cases involving fraud, collusion, wilful misstatement, suppression of fact, or contravention of provisions with intent to evade duty. The CESTAT held that sub-section (4) was not applicable in this case as there was no wilful misstatement of facts or fraudulent claim by the assessee. The Tribunal found that there was no withholding, misstatement, or suppression of facts by the assessee, and the issue of claiming wrong Cenvat credit was subject to differing opinions. Consequently, the limitation period was determined to be one year, not five. The High Court concurred with the CESTAT's decision, emphasizing that the assessee did not act fraudulently or dishonestly in claiming the Cenvat credit. The Court noted that the limitation issue, while sometimes a mixed question of law and fact, did not present any substantial question of law in this case. Therefore, the appeal was dismissed, upholding the Tribunal's decision on the limitation period for issuing the notice to the assessee. This detailed analysis of the judgment highlights the key issues involved and provides a thorough examination of the legal interpretation and findings by the High Court and the CESTAT.
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