2018 (2) TMI 783 - AT - Central Excise

N/N. 149/86 dated 01.03.1986 and 98/88 dated 01.03.88 - extended period of limitation - validity of SCN - Held that - As the activity of the respondent was in the knowledge of the Revenue, nobody has stopped the Revenue to issue SCN within time - As the activity of the respondent came to the knowledge of the department in May 1987 itself and respondent was asked to file requisite declaration under N/N. 149/86, in that circumstance, learned adjudicating authority has rightly held the demand is barred by limitation - appeal dismissed - decided against Revenue.

Summary

Issues:
Revenue's appeal against dropping of show-cause notice by Commissioner (Appeals) and respondent's Cross Objection.

Analysis:
The case involved the import of brass dross for manufacturing brass ingots by the respondent without being registered or filing a declaration for claiming exemption under specific notifications. A show-cause notice was issued to the respondent for the period from 01.03.1986 to 31.03.1988 invoking an extended period of limitation. The matter went through adjudication up to the Tribunal and was remanded for fresh adjudication. The adjudicating authority later held that the demand was barred by limitation. Revenue appealed, arguing that the respondent's failure to file for exemption benefits under the notifications indicated suppression of facts, justifying the invocation of the extended period. The Revenue cited legal precedents to support its position.

The respondent contended that a declaration for exemption had been filed in May 1987, and since the Revenue was aware of this, the show-cause notice issued in October 1988 was time-barred as the activity was known to the Revenue earlier. The respondent argued that the extended period of limitation was not applicable in this case. After hearing both sides, the Tribunal noted that the Revenue was aware of the respondent's activity in May 1987 and had not issued a show-cause notice within a reasonable time. Therefore, the Tribunal upheld the adjudicating authority's decision that the demand was indeed barred by limitation. The Cross Objection filed by the respondent was also disposed of accordingly.