2018 (3) TMI 983 - AT - Central Excise

Liability of duty - extended period of limitation - construction of supporting structures such as gantry girders, rails, columns, civil foundation footings, etc. - Whether such structures are excisable goods and whether excise duty is liable to be paid on such goods under CET 7308 90 10? Held that - The issue came to be decided against the appellant only with the decision of Larger Bench in the case of Mahindra & Mahindra 2005 (11) TMI 103 - CESTAT, NEW DELHI . The merit having been settled against the appellant, the excise duty is liable to be paid on the goods fabricated by the appellant. However, we note that there were conflicting views of different Benches of the Tribunal which came to be decided only with the issue of decision of the Larger Bench. Hence, it will not be fair on the part of the Revenue to take the view that appellant has suppressed the facts in the present case. The Revenue was not justified in invoking the suppression clause for making the demand for extended period - once the issue is settled on merits, the appellant will be liable to pay duty only for the period falling under the normal time limit from the date of issue of show-cause notice. Demand is upheld for the period falling with the normal time limit - adjudicating authority is directed to re-quantify the demand - appeal allowed in part.

Summary

Issues:
Whether supporting structures are excisable goods liable for excise duty under CET 7308 90 10.
Validity of demanding excise duty for the period prior to the settlement of excisability issue.
Applicability of suppression clause in demanding duty for an extended period.
Imposition of penalty justified based on the circumstances.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore was filed against an Order-in-Appeal regarding the excisability of supporting structures like gantry girders, rails, columns, civil foundation footings, etc., and the liability to pay excise duty under CET 7308 90 10. The appellant, engaged in construction of such structures, argued that the issue of excisability was in doubt until settled by a Larger Bench decision in a specific case. The appellant contended that demanding duty for the period prior to the settlement was unjustified. The Revenue, however, claimed that non-payment of excise duty was detected during an audit in 2006, making the appellant liable for payment post-audit. The Tribunal noted the conflicting views of different Benches on the excisability issue, which were resolved by the Larger Bench decision. The Tribunal held that excise duty is payable on the goods fabricated by the appellant post-decision, but the Revenue was not justified in alleging suppression based on the settled merits. Citing a Supreme Court case, the Tribunal emphasized that suppression clause cannot be invoked when there is a bona fide doubt on the excisability issue. Consequently, the Tribunal modified the impugned order, upholding the demand within the normal time limit and setting aside the penalty imposed.

In conclusion, the Tribunal partially allowed the appeal, directing the adjudicating authority to re-quantify the demand within the normal time limit. The Tribunal found no justification for the imposition of a penalty based on the circumstances of the case. The judgment highlighted the importance of settling excisability issues on merits and clarified the applicability of the suppression clause in demanding excise duty for an extended period.