2008 (3) TMI 29 - SC - Central Excise

Excitability of manufacturing of PSC girders at site to be used in the construction of Railway Bridge for Konkan Railways no supression - Demand is being set-aside as extended period of limitation is not applicable without discussing the merit of the case on marketability and excitability of Girders.

Summary

Issues:
1. Appellant's liability for central excise duty on PSC girders manufactured for Konkan Railways.
2. Application of extended period of limitation under Section 11-A of the Central Excise Act, 1944.
3. Interpretation of Notification No.59/90-CE regarding excisability of PSC girders.
4. Bona fide plea and differing views leading to the non-applicability of extended period of limitation.

Analysis:

1. The appeals revolve around the liability of the appellant for central excise duty on PSC girders manufactured for Konkan Railways. The appellant contended that the show cause notice was time-barred and challenged the demand for duty, confiscation of girders, and imposition of penalties. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) initially held that the larger period of limitation was available and referred the marketability issue to a larger Bench.

2. The central issue of the extended period of limitation under Section 11-A of the Act was crucial. The appellant argued that the initial notice was withdrawn, and the subsequent notice issued in 1996 was beyond the statutory period. The Supreme Court emphasized that the extended period of limitation could not be invoked as the facts allegedly suppressed by the appellant were known to the department, rendering the application of Section 11-A impermissible.

3. The interpretation of Notification No.59/90-CE regarding the excisability of PSC girders was contested in separate appeals. The CESTAT held that the benefit of the notification could not be extended to PSC girders as they were not manufactured at the site for building construction, thus subjecting the articles to excise duty. The appellant relied on a previous judgment highlighting the debatable nature of the issue of manufacture, leading to differing views by different Benches.

4. A significant aspect was the appellant's plea of bona fide, which was not rejected, and the existence of divergent views among CESTAT Benches on the issue of manufacture. The Supreme Court concluded that the extended period of limitation could not be invoked due to known facts, and the plea of bona fide further supported the non-application of Section 11-A. Consequently, the Court set aside the CESTAT order in one appeal, leading to the dismissal of connected appeals based on the same grounds.

This detailed analysis of the Supreme Court judgment highlights the key issues, legal arguments, and the Court's reasoning, providing a comprehensive overview of the case.