2019 (6) TMI 682 - HC - Central Excise

Extended period of Limitation - Section 11A(1) of Finance Act - HELD THAT - The learned Tribunal has met with the remand directions of this Court, and since the Tribunal has given cogent reasons for invoking the extended limitation in the first, and second, the issue of alleged misdeclaration of the herbal cough syryup Nivaran-90', whether it was an ayurvedic medicine or not, the assessee can raise all possible objections with regard to the extended limitation before the concerned authority and it is left open to the authority to decide the issues in accordance with law. Appeal dismissed.

Summary

Issues involved:
1. Extended limitation under Section 11A(1) of the Act for a show cause notice.
2. Allegations of misdeclaration of the process of manufacture and formula of a product.
3. Validity of supplementary show cause notice issued.

Extended limitation under Section 11A(1) of the Act for a show cause notice:
The High Court of Madras considered the appeal by M/s.Velvette International Pharma Product against the order of the CESTAT regarding the extended limitation under Section 11A(1) of the Act. The Court analyzed the facts and circumstances, including the date of inspection by officers, the date of the show cause notice, and the supplementary show cause notice. The Court found that the show cause notice was within the extended limitation period as per the provisions of Section 11A(1) of the Central Excise and Salt Act, 1994. The Court dismissed the appeal, affirming that the demand was not time-barred, and the charge of suppression was rightly proved by the authorities.

Allegations of misdeclaration of the process of manufacture and formula of a product:
The Court examined the allegations that the appellants had misdeclared the process of manufacture and formula of the product, suppressing the use of non-ayurvedic ingredients. It was claimed that this misdeclaration was with the intention to evade payment of duty, leading to the invocation of the extended time limit under Section 11A(1) of the Act. The Court upheld these allegations, stating that the misdeclaration and suppression were valid reasons for invoking the extended period of limitation. The Court emphasized that the date of inspection by officers did not affect the period of limitation for issuing the show cause notice.

Validity of supplementary show cause notice issued:
Regarding the supplementary show cause notice issued, the Court clarified that it did not change the quantum of excise duty demanded in the original notice but added a demand for Special Excise Duty. The Court found that the supplementary notice was well within the extended period of limitation invoked. The Court rejected the objections raised by the appellants regarding the supplementary notice, affirming that the date of inspection did not impact the validity of the notice. The Court concluded that the appeal lacked merit and dismissed it, allowing the authorities to decide on the issues raised by the appellants in accordance with the law.

This comprehensive analysis of the judgment highlights the key issues involved and the detailed reasoning provided by the High Court of Madras in reaching its decision.