2018 (8) TMI 1442 - AT - Central Excise

Activity of fabrication of trusses at the site of Visakhapatnam Steel Plant - demand of duty with penalty - the show cause notice dated 31.01.1990 is demanding Central Excise Duty and seeks to impose a penalty for the activity of fabrication of trusses at the site of Visakhapatnam Steel Plant - Held that - It is the case of the appellant that the show cause notice has not demanded any duty from them post August, 1989 and the original authority has confirmed the demands for the period of 6 months. Even appeal of the assessee is liable to be rejected as the adjudicating authority has correctly recorded and held that the duty demanded for the period 6 months prior to the date of show cause notice needs to be confirmed because show cause notice itself does not indicate the exact amount of duty for the period - the assessee s appeal also lacks merit and demand for the period of 6 months from the date of issue of show cause notice is liable to be upheld. Penalty - Rule 9(2) r/w Rule 173 of the erstwhile Central Excise Rules, 1944 - Held that - The penalty needs to be set aside as the entire issue is regarding classification of the trusses fabricated and is a settled law that penalty need not be imposed, if the issue is of classification - penalty set aside. Appeal allowed in part.

Summary

Issues: Classification of trusses for excise duty, invocation of extended period for demand, imposition of penalty under Central Excise Rules.

In the judgment by the Appellate Tribunal CESTAT HYDERABAD, two appeals were considered against the same Order-in-Original. The Revenue filed one appeal, while the Assessee filed the other. The appeals were directed against the same order, leading to a common disposal. Despite the absence of representation from the Assessee, the appeals were taken up for disposal due to their age and the narrow compass of the issue. The Learned Commissioner (AR) highlighted that the issue pertained to the classification of trusses used in construction and fabrication at a specific site. Referring to relevant case law, the Commissioner argued that the extended period for demand was correctly invoked due to the Assessee's failure to disclose the fabrication activity. Citing legal precedents, the Commissioner contended that the classification issue was settled and the Assessee's non-disclosure warranted the extended period for demand.

Upon careful consideration of the submissions and records, the Tribunal noted that the adjudicating authority had previously dropped proceedings beyond a specific period due to the issue being settled in favor of the Assessee. The Tribunal agreed with the adjudicating authority's decision to restrict the demands raised beyond the specified period. The Commissioner's reliance on a Supreme Court judgment to support the extended period invocation was countered by the Tribunal, which referenced a subsequent apex court judgment to affirm that the extended period could not be invoked for a previously adjudicated issue. Consequently, the appeal filed by the Revenue was deemed meritless and rejected.

Regarding the Assessee's appeal, it was argued that the demands made beyond a certain period were not supported by the show cause notice. The Tribunal upheld the adjudicating authority's decision to confirm the duty demands for the specified period, as the notice did not specify the exact amount of duty beyond that period. The Tribunal found the Assessee's appeal lacking merit and upheld the demand for the specified period. The penalty imposed on the Assessee under the Central Excise Rules was set aside, considering that the issue primarily revolved around the classification of trusses, for which penalties were not warranted. Both the Assessee's and the Revenue's appeals were disposed of accordingly.