2018 (8) TMI 605 - AT - Central Excise

Validity of SCN - Time Limitation - impugned order assailed on the ground that the SCN has been issued by the Department beyond the period of 5 years from the relevant date and accordingly, the proceedings initiated cannot be sustained - Held that - There is confusion regarding actual mode of communication of the adjudication order on the appellant - also, the Department was not in possession of any documentary evidence to prove the date of receipt of the show-cause notice by the appellant. Since the period in dispute is March 2005 to April 2005, the show-cause notice should have been issued within 5 years from such relevant date. In view of the fact that the notice had been issued after 5 years, the same cannot be acted upon for confirmation of the adjudged demand. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Time limitation for issuance of show-cause notice under Section 11A(1) of the Central Excise Act, 1944.

Analysis:
The appeal challenged an order passed by the Commissioner of Central Tax (Appeals-I), Pune, where the appellant contended that the show-cause notice was issued beyond the 5-year period from the relevant date, rendering the proceedings unsustainable. The appellant argued that although the notice was issued on 26.03.2010, it was communicated on 17.05.2010, exceeding the limitation period. The Advocate for the appellant emphasized the importance of compliance with Section 11A(1) of the Act regarding the limitation period. On the contrary, the Department's Representative supported the findings of the impugned order.

Upon reviewing the case records, the Member (Judicial) observed a lack of clarity regarding the mode of communication of the adjudication order to the appellant. Additionally, the Commissioner (Appeals) noted the absence of documentary evidence with the Department to establish the date of the show-cause notice receipt by the appellant. Given the non-compliance with Section 37C of the Act, the Member accepted the appellant's claim of receiving the notice on 17.05.2010 as the date of receipt for limitation calculation. As the dispute period was March 2005 to April 2005, the show-cause notice should have been issued within 5 years from the relevant date. Since the notice was issued after the 5-year limit, it could not be used for confirming the demanded amount.

Consequently, the Member found no merit in the impugned order by the Commissioner (Appeals) and allowed the appeal in favor of the appellant, setting aside the earlier decision. The judgment highlighted the significance of adhering to statutory time limitations for initiating proceedings under the Central Excise Act, 1944, ensuring fairness and procedural compliance in tax matters.