2018 (3) TMI 833 - AT - Central Excise

Ineligible deduction from the total turnover - demand of differential duty - Held that - the first appellate authority has correctly came to the conclusion in setting aside the Order-in-Original - it was held that there is no suppression with intent to evade payment of duty - Mere non-mentioning of the second sale on the invoices would not suffice to prove that the unit is indulged in evasion of duty and deliberately suppressed the facts. The findings of the first appellate authority on limitations are correct - appeal dismissed

Summary

Issues involved:
1. Demand of differential duty due to availing ineligible deduction from total turnover.
2. Whether the show cause notice was time-barred.

Analysis:

Issue 1: Demand of differential duty
The case revolved around the demand of differential duty from the respondent due to availing an ineligible deduction from the total turnover. The first appellate authority correctly set aside the Order-in-Original after considering the arguments presented. It was noted that there was no evidence of suppression with intent to evade duty by the appellants. The failure to mention the second sale on the invoices was not sufficient to prove evasion of duty. The authority also referenced a relevant ruling by the Tribunal in a similar case to support their decision. The Tribunal found merit in the arguments presented and concluded that the appeal lacked substance, leading to its dismissal.

Issue 2: Time-barred show cause notice
The second issue in question was whether the show cause notice was time-barred. The first appellate authority analyzed the timeline of events, highlighting that the notice was issued almost four years after the initial search operation. It was emphasized that while the department can issue a notice covering a period of five years, it must be done within a reasonable time after the conclusion of the investigation. The authority found that the delay in issuing the notice was significant and not in line with the purpose of the statutory limitation period. Consequently, it was determined that the notice was indeed hit by limitation. The Tribunal concurred with this finding, supporting the decision of the first appellate authority and ultimately dismissing the appeal.

In conclusion, the judgment by the Appellate Tribunal CESTAT Hyderabad addressed the issues of demand of differential duty and the timeliness of the show cause notice. The decision highlighted the lack of evidence of intent to evade duty by the appellants and the importance of adhering to statutory limitation periods for issuing notices. The ruling underscored the necessity for fair and timely procedures in dealing with matters of duty evasion, ultimately leading to the dismissal of the appeal.