2017 (10) TMI 1045 - AT - Central Excise

Extended period of limitation - SSI Exemption - evasion of duty - suppression of value - during the period 2005-06, the appellant availed SSI exemption and their sales turn over crossed the SSI exemption limit. It is a fact on record that in 2005, a search was conducted at the factory premises of the appellant and all relevant records have been scrutinized and it was found that appellant has crossed SSI exemption limit - Held that - extended period of limitation is not invokable as it was in the knowledge of the Revenue on 10.6.06 that the appellant has crossed the SSI exemption limit but no action was taken within time against the appellant and no further inquiry was conducted after 10.6.2006 to issue the show cause notice - extended period of limitation is not invokable and the impugned demands against the appellants are not sustainable - penalties also set aside. In similar set of facts in the case of Amway India Enterprises Pvt. Ltd. vs CCE, New Delhi 2017 (3) TMI 616 - CESTAT NEW DELHI , Tribunal has held that since the modus operandi adopted by the appellant for selling its products were known to the Department and based on the information/documents furnished by the appellant in 2005, the show cause proceedings were initiated by the Department on 12.03.2009, seeking confirmation of service tax demand under Franchise Service for the period October 2003 to March 2007, we are of the considered view that the proceedings are barred by limitation of time. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against impugned order invoking extended period of limitation for non-payment of excise duty despite crossing SSI exemption limit.

Analysis:
The case involves the appellants appealing against demands raised by invoking the extended period of limitation due to non-payment of excise duty despite exceeding the SSI exemption limit. The appellants, engaged in manufacturing medicines, were found to have removed goods without duty payment, crossing the exemption limit. The show cause notice was issued in 2008, alleging deliberate non-payment of duty. The appellants argued that certain goods' value was taken twice and that the investigation conducted in 2006 barred the notice issued in 2008.

The contention revolved around whether the extended period of limitation was rightfully invoked. The appellants cited cases where suppression of facts was not established as a basis for invoking the extended period. The Revenue argued that the appellants knowingly crossed the exemption limit and did not register with the department, justifying the extended period. Both sides presented conflicting decisions to support their positions.

The Tribunal analyzed the facts, noting the appellants' knowledge of crossing the exemption limit in 2005 and the delayed show cause notice in 2008. Referring to previous judgments, the Tribunal emphasized that suppression cannot be established when relevant facts are known to the Revenue. As the modus operandi of the appellants was known to the department, the proceedings initiated in 2009 were held to be time-barred. Consequently, the extended period of limitation was deemed inapplicable, leading to the appeal's success on limitation grounds.

The Tribunal concluded that the extended period of limitation was not invokable as the Revenue was aware of the appellants' actions but took no timely action. Therefore, the demands against the appellants were deemed unsustainable, and penalties were not imposable. The impugned order was set aside, and the appeals were allowed with any consequential relief.

In summary, the judgment focused on whether the extended period of limitation was rightly invoked due to the appellants' actions regarding excise duty payment exceeding the SSI exemption limit. The decision highlighted the importance of establishing suppression of facts for invoking the extended period and concluded that the demands were not sustainable due to the Revenue's delayed action despite knowledge of the appellants' actions.