2023 (6) TMI 59 - AT - Central Excise

Extended period of limitation - Excisability - manufacture of Cable Jointing Kits which comprises of various components - suppression of facts - extended period of limitation - HELD THAT - By remanding the matter Tribunal has vide order no A/1008-1010/12/EB/C-II has held that The present demands are made by issuing different show-cause notices on the ground that the appellants were clearing the compounds to independent buyers and also captively consuming the same and therefore the appellants were wrongly paying duty under Rule 8 of the Central Excise Valuation Rules. The provisions of Rule 8 of Central Excise Valuation Rules are applicable when the goods manufactured are captively consumed only. In the order of Commissioner (Appeals) that earlier show-cause notices were issued on the issue of valuation also which have been adjudged by the Commissioner (Appeals) in favour of the Appellant. Revenue has not filed any appeal against this order. Hence assessment proceedings are finalized by the set order - Issuance of another show-cause notice in 2012 invoking extended period of limitation sustained for the reason that entire facts were in the knowledge of department and charge of suppression etc., required for invoking extended period cannot be sustained. Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are related to the confirmation of Central Excise duty demand, dropping of certain demands, order of recovery of duty and interest, imposition of penalty, and the availability of benefit under Notification No. 3/2006-CE.

Confirmation of Central Excise Duty Demand:
The order confirmed the demand of Central Excise duty amounting to Rs.71,87,040 due to undervaluation of goods, while dropping the demand of Rs.6,03,986. The remaining duty amount was ordered to be recovered from the assessee along with interest. A penalty of Rs.71,87,040 was imposed under Section 11AC of the Central Excise Act, 1944. The option was given to the assessee to pay reduced penalty if the specified conditions were met.

Valuation Issue and Previous Litigation:
The appellant, engaged in manufacturing Cable Jointing Kits, faced a show cause notice proposing to revise the value of a component based on expenses incurred in Bangalore. The appellant argued that the matter was already covered in earlier litigation and the show cause notice issued after two years was barred by limitation. The issue of valuation under Rule 8 was emphasized.

Benefit under Notification No. 3/2006-CE:
The judgment discussed the denial of benefit under Notification No. 3/2006-CE to the appellants based on procedural lapses. The eligibility for exemption under the notification was not disputed, and the benefit was denied solely on the ground of not claiming it at the time of clearance. Various legal precedents were cited to support the contention that substantial benefits cannot be denied due to procedural lapses.

Adjudication and Finalization of Assessment:
The Commissioner (Appeals) adjudicated on earlier show-cause notices related to valuation issues in favor of the appellant. The assessment proceedings were finalized based on those orders. The issuance of a show-cause notice in 2012 invoking the extended period of limitation was not sustained due to lack of grounds for suppression, leading to the allowance of the appeal.