2019 (2) TMI 1553 - AT - Central Excise

Goods manufactured in the factory belonging to state government and intended to use by any department of the government - benefit of N/N. 74/1993-CE dated 28.02.1993 - poles manufactured by the appellant are supplied to the distribution division of Uttar Pradesh State Electricity Board (UPSEB) for use in the electrification of the Government scheme - benefit was denied on the ground that appellant cannot be called to be a state government - time limitation - Held that - Though the appellant have contested the demand by submitting that they are state government but we are of the view that the appeal can be disposed of on the point of limitation. The demand is for the period July, 2012 to December, 2014 whereas the show cause notice stand issued on 05.06.2015 i.e. by invoking the larger period of limitation. The appellants have strongly contended that when the issue stands decided in their own case extending the benefit of the notification to them no mala-fide can be attributed so as to justifiably invoke the longer period of limitation. We find favor with the above contention of the learned advocate - Otherwise also it is well settled law that when the issue stand referred to Larger Bench on the ground of doubting the correctness of the earlier orders, no mala-filed can be attributed to the assessee. The longer period is not available to the Revenue. However, a part of the demand may fall within the limitation period for which the matter is being remanded for requantification - appeal disposed off.

Summary

Issues:
1. Interpretation of Notification No.74/1993-CE regarding excise duty exemption for goods manufactured by state government factories.
2. Determination of eligibility for exemption under the notification for a manufacturing unit supplying goods to a government department.
3. Application of the period of limitation in invoking demands and penalties for excise duty.
4. Consideration of the impact of Tribunal and Supreme Court judgments on the eligibility for exemption.
5. Assessment of whether the appellant acted in good faith in availing the exemption benefit.

Analysis:
1. The appellant, engaged in manufacturing PCC Poles supplied to the state electricity board, availed exemption under Notification No.74/1993-CE. Central Excise officers seized poles, claiming ineligibility for exemption, leading to a demand of duty amounting to &8377; 91,95,692 for the period from July 2012 to December 2014.

2. The Adjudicating Authority confirmed a demand of &8377; 36,33,691, imposed penalties, and confiscated goods. The appellant contended their status as a state government entity, citing a previous Tribunal decision supporting their eligibility for exemption. The Tribunal's Larger Bench later questioned the earlier decision.

3. The Tribunal considered the limitation period, noting the appellant's good faith reliance on the previous favorable decision. It held that invoking the longer period was unjustified due to the appellant's belief in their entitlement to the exemption based on the Tribunal and Supreme Court rulings.

4. Referring to the precedent set by the Supreme Court in similar cases, the Tribunal concluded that no malice could be attributed to the appellant for following the earlier decision. The matter was remanded for reevaluation within the limitation period, setting aside confiscation and penalties due to the absence of malice.

5. The Tribunal emphasized that the appellant's actions were in good faith, following established legal precedents. It determined that the longer period was not applicable, and only a part of the demand may fall within the limitation period. The appeal was disposed of accordingly, with the seized goods required to be cleared on payment of duty.

This detailed analysis of the judgment highlights the complex legal issues surrounding excise duty exemption, eligibility criteria, period of limitation, and the impact of legal precedents on the appellant's case.