2022 (1) TMI 392 - AT - Central Excise

Supporting manufacturer or not - Procurement of inputs under Advance licence Scheme - appellant has not disclosed the facts to the department - suppression of facts or Mis-declaration - extended period of limitation - Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001 - HELD THAT - The present case can be decided on limitation itself therefore, the issue on merit is not decided. In the present case demand involved is for the year 2008 whereas Show cause notice has been issued in June 2013 therefore, the entire demand is under extended period. The Show cause notice as well as the Order-In- Original alleged that the appellant has not disclosed the facts to the department that they have procured the duty free material from the M/s Sterlite Industries (I) Ltd against invalidation of advance licence. On this basis the larger period was invoked. The appellant vide letter 25.02.2010 again intimated that there is no violation of Para 4.16 of Handbook Procedure. From the above it is clear that the appellant have disclosed all the information as regard procurement of material under advance authorization from M/s Sterlite Industries (I) Ltd. Therefore, there is no suppression of facts or Mis-declaration on the part of the appellant. The demand is clearly hit by limitations. Since the entire demand is under extended period the same is not sustainable on limitation - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Irregular availment of benefit of duty-free procurement under advance license.
2. Allegation of violation of import procedures and duty obligations.
3. Imposition of duty, interest, and penalties.
4. Argument on merit and limitation.
5. Disclosure of facts and suppression of information.
6. Decision on limitation and sustainability of the demand.

Analysis:
1. The appellant, engaged in manufacturing electric wires and cables, procured duty-free raw materials against invalidation of advance licenses. The show cause notice alleged irregular benefit availed by the appellant due to procurement by an unendorsed unit.

2. The notice contended that the appellant failed to follow import procedures as per the Foreign Trade Policy and Handbook of Procedures. It proposed duty demand, interest, and penalties, including personal penalty on the authorized signatory.

3. The Adjudicating Authority upheld the charges, leading to the appellant's appeal against the Order-In-Original. The appellant argued on merit and limitation, while the revenue reiterated the findings.

4. The Tribunal found the case determinable on limitation due to the extended period involved. The appellant had intimated the department about the procurement, refuting the allegation of non-disclosure, thereby rendering the demand unsustainable.

5. The Tribunal noted that the appellant had disclosed the procurement details and clarified no violation of import procedures, refuting the suppression of facts. Consequently, the demand was deemed hit by limitations, leading to the setting aside of the impugned order and allowing the appeal.

6. The decision highlighted the importance of timely disclosure and adherence to import regulations to avoid allegations of irregularities. The case emphasized the significance of procedural compliance and transparency in dealings to prevent disputes and penalties.