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2019 (6) TMI 498 - AT - Central ExciseMaintainability of appeal - Compliance with the pre-deposit - Section 35B of the Central Excise Act, 1944 - HELD THAT - The requirement of Section 35B of the Act has been satisfied by the Revenue while filing this appeal. After perusal of Authorization signed by both the Commissioners constituting the Committee of Commissioners, as required under Section 35B, we are satisfied that the requirement stipulated in Section 35B has been duly satisfied and the appeal filed by the Revenue is maintainable. Valuation - petroleum products - price reduction factor - permissible deduction - Section 4 of the Central Excise Act, 1944 - reduction of the Excise duty rates of MS and HSD by the Government - period w.e.f. 01.03.2002 to 05.09.2004 - extended period of limitation - HELD THAT - The Commissioner (Appeals), in the impugned order has discussed the issue at length on merit and has concluded that there is no justification for demand of differential duty. He has considered such reduction in assessable value to be in the form of a trade discount , which is admissible in terms of Section 4 of the Central Excise Act, 1944. After carefully considering the findings of the ld.Commissioner (Appeals), we find no reason to interfere with the same and we uphold the same. Extended period of limitation - suppression of facts or not - HELD THAT - Reduction in assessable value to the extent of Price Reduction Factor has been carried out by the respondent as per the specific direction of the Ministry of Petroleum and Natural Gas vide their letter dated 28.02.2002, which was issued in the backdrop of the proposal in the Budget of 2002 for reduction in duty rates for MS/HSD. Consequently, such reduction in the assessable value could not be said to be by resorting to suppression - In the absence of anything on record to sustain the allegation of suppression, the demand raised in the show-cause notice is hopelessly barred by limitation. Appeal dismissed - decided against Revenue.
Issues:
1. Compliance with Section 35B of the Central Excise Act, 1944 for filing an appeal by the Revenue. 2. Disallowance of reduction in assessable value termed as "Price Reduction Factor" for payment of Central Excise duty. 3. Allegation of suppression and demand for differential duty by the Revenue. 4. Extended period of limitation for raising the demand by the Revenue. Issue 1: Compliance with Section 35B of the Central Excise Act, 1944 The appeal filed by the Revenue was challenged on the grounds of not complying with Section 35B of the Act, requiring the appeal to be accompanied by the order of the Committee of Commissioners. The Respondent contended that the appeal lacked the necessary order, making it non-maintainable. However, the Revenue argued that the appeal was filed as per the direction and authorization of the Committee of Commissioners, supported by an "Authorization" dated 13.04.2009 signed by both Commissioners. The Tribunal examined the Authorization and concluded that the appeal satisfied the requirements of Section 35B, making it maintainable for further consideration on merit. Issue 2: Disallowance of reduction in assessable value The dispute revolved around the reduction in assessable value termed as "Price Reduction Factor" for Motor Spirits (MS) and High Speed Diesel (HSD) by the Respondent as per the Ministry of Petroleum and Natural Gas's direction. The Revenue alleged that this reduction was not a permissible deduction under Section 4 of the Central Excise Act, 1944, and issued a show-cause notice for the demand of differential duty. The Commissioner (Appeals) set aside the demand, considering the reduction as a "trade discount" admissible under the Act. The Tribunal upheld the Commissioner's decision, emphasizing that the reduction was in line with the Ministry's directive and did not warrant interference. Issue 3: Allegation of suppression and demand for differential duty The Revenue raised an allegation of suppression against the Respondent in issuing the show-cause notice for the demand covering a specific period. However, the Tribunal found no basis for the suppression claim, noting that the reduction in assessable value was carried out as per the Ministry's directive following the Budget proposal of 2002. As there was no evidence of suppression, the demand raised in the show-cause notice was deemed time-barred and unsustainable. Issue 4: Extended period of limitation The Revenue invoked the extended period of limitation under Section 11A of the Act for raising the demand, alleging suppression. However, the Tribunal dismissed this allegation, emphasizing that the reduction in assessable value was in compliance with the Ministry's directive and did not amount to suppression. Consequently, the demand raised beyond the normal time limit was considered baseless and legally unsustainable. In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) in favor of the Respondent, rejecting the appeal filed by the Revenue. The Tribunal found no grounds to interfere with the Commissioner's findings regarding the reduction in assessable value and suppression allegation, ultimately ruling in favor of the Respondent.
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