2017 (10) TMI 393 - AT - Central Excise

SSI Exemption - extended period of limitation - Section 11D of CEA - the appellant referred to earlier proceedings - Held that - On perusal of such proceedings as available in the order dated 3.12.1999, it is found that the said proceedings are with reference to issue of brand name used by the appellant. The present is with reference to the issue of eligibility of the appellant to SSI exemption and the period is also different - the present proceedings cannot be considered as consequence of the earlier investigations which resulted in different proceedings - extended period rightly invoked. Penalty u/s 11AC - invocation of section 11D - Held that - The fact that such duty has been collected and retained by the appellant will necessarily attract Section 11D also. The lower authorities invoking such provisions of Section 11D for already collected tax but not deposited to the Government by itself will not mitigate the demand under Section 11A which is legally sustainable. In fact, the amount which was collected in excess of due amount liable to the Government, but collected in the name of excise duty shall also be deposited under Section 11D. Interest - Held that - interest in terms of Section 11AB should be attributable only to Central Excise duty not paid in time by the appellant, however, the said interest will arise only after the introduction of provisions of Section 11AB from 28.9.1996 as affirmed by the impugned order. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Extended period demand sustainability
2. Imposition of penalty under Section 11AC
3. Applicability of interest under Section 11AB for demands under Section 11D

Extended Period Demand Sustainability:
The appeal challenged an order of the Commissioner (A) regarding the liability of the appellants for Central Excise duty under Section 11A for the period 1995-96 to 1996-97. The investigation raised concerns about possible non-payment of duty and misuse of SSI exemption. The Tribunal earlier remanded the matter to the original authority to re-examine the issue. The appellant argued that the demand for the extended period was not sustainable due to prior proceedings, but the Tribunal found that the present proceedings were distinct and correctly invoked the extended period based on the facts.

Imposition of Penalty under Section 11AC:
The appellant contested the penalty imposed under Section 11AC, arguing that it should not apply for demands under Section 11D. However, the Tribunal upheld the penalty, stating that the duty confirmed under Section 11A was directly linked to the penalty under Section 11AC. The Tribunal clarified that the appellant's failure to pay the duty collected from buyers to the Government attracted both Sections 11A and 11D, justifying the penalty under Section 11AC.

Applicability of Interest under Section 11AB for Demands under Section 11D:
Regarding the interest under Section 11AB, the appellant claimed that it should not apply to demands under Section 11D. The Tribunal analyzed the provisions and noted that interest under Section 11AB would be attributable only to Central Excise duty not paid in time, effective from the introduction of the provision on 28.9.1996. The Tribunal affirmed the imposition of interest as per the impugned order, aligning with the legal framework.

In conclusion, the Tribunal found no infirmity in the lower authorities' decisions and dismissed the appeal after considering the arguments and legal provisions presented by both parties.