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2019 (6) TMI 260 - AT - Central ExciseRecovery of Excise duty from the purchaser of goods in auction - goods purchased by the appellant in auction and subsequently sold by dismantling the same as waste and scrap - time limitation - HELD THAT - It is admitted fact that the appellants are neither manufacturer of any excisable goods nor they have used purchased goods for manufacturing other goods. They have only carried out the dismantling of waste factory goods. In this fact, the appellant has neither manufactured excisable goods nor even there an issue of availment of Cenvat Credit on such purchased goods. In this effect, when the appellant is admittedly not a manufacturer of excisable goods, no duty can be demanded under section 11A (i) if at all there is any duty liability in respect of goods purchased by the appellant, it is the manufacturer who is supposed to pay the duty and if at all there is any liability, it will arise against M/s Gujarat Narmada Auto Ltd. Since the appellant have purchased the goods in auction, the department is free to settle their excise duty with Official Liquidator and not from the appellant. It is also not the case of the department that dismantling of capital goods is amount to manufacture. Therefore, there is no basis in the department s proceedings to demand any Excise Duty from the appellant. Time limitation - HELD THAT - The entire facts of purchase of goods under auction and sale thereof were well within the knowledge of the department. Therefore, the department if at all was of the view that any duty liability arise, they were free to issue a Show Cause Notice well within the normal period of limitation provided under section 11A (1) - demand is hit by time bar. Appeal allowed - decided in favor of appellant.
Issues:
1. Liability of the appellant for Central Excise duty on goods purchased in auction and subsequently sold as waste and scrap. 2. Invocation of the extended period of limitation for demanding Excise duty. 3. Imposition of redemption fine in the absence of confiscated goods. Issue 1: Liability for Central Excise Duty The case involved M/s Gujarat Narmada Auto Ltd. (GNAL) going into liquidation, with the appellant purchasing the company's assets in an auction. The appellant sold dismantled goods as waste and scrap, leading to a demand for Central Excise duty. The appellant argued they were not manufacturers and the duty liability should fall on GNAL. The Tribunal agreed, stating that as the appellant did not manufacture excisable goods, no duty could be demanded from them. The department was advised to settle any duty liability with GNAL, not the appellant. The Tribunal cited previous judgments to support the position that dismantling goods does not attract excise duty. Issue 2: Extended Period of Limitation The appellant contested the invocation of the extended period of limitation for demanding Excise duty. The Tribunal noted that the department was aware of the auction and dismantling activities, yet delayed issuing the Show Cause Notice beyond the normal limitation period. As a result, the demand was deemed time-barred. The Tribunal emphasized that since the department had all relevant information within their knowledge, the delayed issuance of the notice was unjustified, leading to the dismissal of the demand based on time constraints. Issue 3: Imposition of Redemption Fine Regarding the imposition of a redemption fine in the absence of confiscated goods, the appellant argued against its validity. Citing relevant judgments, the appellant contended that without confiscated goods, a redemption fine should not be imposed. The Tribunal agreed with this stance, stating that since the goods were not available for confiscation, the imposition of a redemption fine was unwarranted. The Tribunal referred to established case law to support its decision. In conclusion, the Tribunal ruled in favor of the appellant, setting aside the demand for Central Excise duty, citing the lack of liability on the appellant as a non-manufacturer and the time-barred nature of the demand due to delayed issuance of the Show Cause Notice. Additionally, the Tribunal rejected the imposition of a redemption fine in the absence of confiscated goods.
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