2017 (12) TMI 227 - AT - Central Excise

Extended period of limitation - Manufacture - whether cold rolling of CRSS products and reducing the size of the same and during the process increasing in the hardness, amounts to manufacture? - Held that - the SCN was issued on 14.06.2000 and the period covered was 30.09.1995 to 11.04.2000. During the relevant period normal period of show cause notice was 6 months - Further, u/s 11A of Central Excise Act, 1944 as it existed during material period when the extended period is invoked then in the wording of the Section the words are substituted for 5 years. The word 6 months does not continue to remain. Therefore, once the extended period is invoked, the normal period is not available for invocation - the SCN dated 14.06.2000 is hit by limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Allegation of undertaking manufacture of CRSS rolled products
- Allegation of engaging in processing of scrap
- Demand of Central Excise duty
- Proposal to impose personal penalty
- Consideration of technical literatures and certificates
- Remand of the matter back to the Original authority
- Compliance to the directions of remand
- Imposition of penalties on the appellants-manufacturers
- Imposition of personal penalties
- Issue of limitation raised by the appellants
- Show cause notice being time-barred
- Invocation of extended period
- Decision on the sustainability of the show cause notice

Analysis:
The judgment involves three appeals directed against a common Order-in-Original passed by the Commissioner of Central Excise & Customs. The manufacturer-appellants were alleged to be involved in the manufacture of CRSS rolled products and processing of scrap. The show cause notice raised demands of Central Excise duty and proposed personal penalties. The matter was previously adjudicated, remanded back to the Original authority, and compliance with the remand directions was sought. The Original authority confirmed the demand, imposed penalties, and personal penalties on the appellants. The appellants raised issues of limitation, arguing that the show cause notice was time-barred due to declarations made under Rule 17B of the Central Excise Rules, 1944. The appellants contended that the show cause notice was not hit by limitation, presenting evidence of declarations and submissions made to the jurisdictional Assistant Commissioner. The Original authority's decision on limitation was challenged by the appellants.

The Tribunal considered the rival contentions and reviewed the records. It noted that the show cause notice was issued on a specific date covering a period where the normal period for a show cause notice was six months. However, under Section 11A of the Central Excise Act, when the extended period is invoked, the normal period is substituted for five years. Therefore, once the extended period is invoked, the normal period is no longer available for invocation. The Tribunal held that the show cause notice dated 14.06.2000 was hit by limitation due to the invocation of the extended period. As a result, the Tribunal set aside the impugned Order-in-Original, allowing all the appeals filed by the appellants. The appellants were deemed entitled to consequential relief as per the law.

In conclusion, the judgment addressed multiple issues, including the allegation of manufacturing activities, processing of scrap, imposition of penalties, consideration of technical aspects, compliance with remand directions, and the crucial issue of limitation regarding the show cause notice. The Tribunal's decision on the sustainability of the show cause notice in light of the invoked extended period was pivotal in setting aside the impugned order and ruling in favor of the appellants.