2018 (7) TMI 973 - AT - Central Excise

Extended period of limitation - Demand of Central Excise duty - Drum washer machine/relax drum machine - benefit of N/N. 6/2002-CE dated 1.3.2002 and N/N. 6/2006-CE dated 1.3.2006 - Held that - The appellants have during this period filed returns claiming the benefit of notification. There is no assertion that they have mis-declared the product. Their unit was also audited numerous times. The description in the returns is Relax drum machine and the benefit of notification has been claimed. In these circumstances it cannot be said that the appellants had suppressed anything or had an intention to evade payment of duty - appeal allowed on limitation.

Summary

Issues: Appeal against the demand of Central Excise duty, interest, and penalty based on denial of exemption under Notification No. 6/2002-CE and Notification No. 6/2006-CE for Drum washer machine/relax drum machine.

Analysis:
1. Claim of Nil Rate of Duty: The appellant, engaged in manufacturing Drum washer machine/relax drum machine, claimed exemption under Notification No. 6/2002-CE, Sr. No. 193 and List 6, Sr. No. 5. The exemption was continued under Notification No. 6/2006-CE. The appellant argued that their product falls under the description in Sr. No. 5 of List 6, citing technical/trade names and expert reports from Chartered Engineers and SASMIRA. The reports certified that the machine is used for fabric relaxation, enhancing fabric quality. The appellant contended that the machine is covered by the notification's description.

2. Limitation Issue: The appellant raised concerns about the absence of findings on limitation in the impugned order. They maintained that they accurately described the machine in their returns during the period, asserting no suppression. The Revenue invoked an extended period of limitation. However, the appellants consistently filed returns claiming the notification's benefit without misdeclaration. The unit underwent multiple audits, and the description in the returns matched the claimed benefit, indicating no intent to evade duty.

3. Precedent and Tribunal Decision: The AR relied on a Tribunal decision in a similar case, Bhagyarekha Engineers Pvt. Ltd., where, based on reports from SASMIRA and MANTRA, the matter was decided against the assessee. Despite this precedent, the Tribunal in the current case found that the Revenue's invocation of an extended period of limitation was unfounded. The consistent filing of returns without misdeclaration or suppression by the appellants led to the allowance of the appeals on limitation grounds.

In conclusion, the Tribunal allowed the appeals based on the limitation issue, emphasizing that the appellants' compliance with filing returns accurately claiming the notification's benefit, coupled with no evidence of suppression or intent to evade duty, warranted the decision in their favor.