2019 (4) TMI 998 - AT - Central Excise

Extended period of Limitation - non-adoption of new Rule 10A of Central Excise Rules - mis-declaration and suppression of facts or not - HELD THAT - The disputed period is 01.04.2007 to March 2008 and the SCNs were issued on 12.05.2009 and 05.11.2009. The facts are very clear, the department can never claim to be not in the know of various events, the assessee had remitted the duty alongwith interest even before the Revenue could allege non-compliance with Rule 10 A. Firstly, when there is no dispute with regard to regular filing of returns, then the CERA audit and internal audit, and the fact that upon being pointed out the differential duty, the same was made good immediately with appropriate interest, coupled with no allegation or even a whisper about any technical breach or lack of explanation in the SCNs, lead to irrefutable conclusion that the SCNs were issued in a routine manner without any proper justification whatsoever. The same are therefore issued beyond the normal period only to impose penalty and the same has rightly been knocked down by the Commissioner (Appeals). Appeal dismissed - decided against Revenue.

Summary

Issues: Appeal against order of First Appellate Authority on invocation of larger period of limitation.

Analysis:
1. Invocation of Larger Period of Limitation:
- Revenue contended that non-adoption of new Rule 10A of Central Excise Rules amounted to mis-declaration and suppression, leading to issuance of Show Cause Notice (SCN) under Section 11A(2B) of the Central Excise Act, 1944.
- Assessee argued that differential duty was paid promptly, disputes were resolved, and no intention to evade duty existed.
- Assessee highlighted that duty was paid in excess for certain periods, no short payment overall, and no suppression of facts.
- Relying on Supreme Court decisions, assessee argued that mere non-payment does not imply fraud or suppression.
- Tribunal noted that no challenge was made regarding valuation under Rule 10A, limiting the appeal scope to the period of limitation invocation.
- Detailed examination of SCNs revealed no allegations of fraud or intention to evade duty, only technical contraventions were mentioned.
- Assessee's compliance with filing returns, audit findings, and prompt payment of duty were acknowledged.
- Tribunal concluded that SCNs were routine, lacking proper justification, and issued beyond the normal period for penalty imposition.
- Citing Supreme Court precedent, Tribunal dismissed Revenue's appeal, affirming the First Appellate Authority's decision.

2. Valuation of Job Worked Goods:
- Assessee did not challenge valuation findings under Rule 10A of Valuation Rules, 2000, focusing appeal on limitation period invocation.
- Detailed examination of invoices, conversion charges, and duty payments indicated no intentional evasion of duty.
- Lack of disputes regarding technical or legal compliance, coupled with prompt rectification of discrepancies, supported the assessee's position.
- Tribunal emphasized that SCNs lacked substantial allegations of fraud or suppression, primarily focusing on technical rule contraventions.
- Assessee's proactive approach in rectifying discrepancies, coupled with no evidence of intentional evasion, led to the dismissal of Revenue's appeal.

In conclusion, the Tribunal upheld the First Appellate Authority's decision, emphasizing the lack of substantial evidence supporting the Revenue's claims of intentional evasion. The detailed analysis of SCNs, compliance records, and prompt rectification of discrepancies favored the assessee, leading to the dismissal of the appeal.