1999 (10) TMI 79 - HC - Central Excise

Summary

Issues:
1. Central Excise duty liability on the petitioner for operating without registration and maintaining statutory records.
2. Consideration of financial constraints and hardship by the Commissioner (Appeals).
3. Application of limitation period under Section 11A of the Central Excise Act regarding the demand notice.

Analysis:

1. The petitioner, a manufacturer of corrugated boxes and paper cones, was found operating without registration and maintaining statutory records during a visit by Central Excise Officers. As a result, a show cause notice was issued demanding payment of Central Excise duty on intermediate goods used in manufacturing, as well as on paper cones exceeding the small scale exemption limit. The Additional Commissioner confirmed the demand and imposed a penalty, which the petitioner contested. The issue of the notice being beyond the limitation period under Section 11A was raised by the petitioner.

2. The petitioner contended that financial constraints and hardship were not considered by the Commissioner (Appeals) while passing the order. The petitioner's waiver-cum-stay application highlighted the meager profit margin and restructuring efforts, emphasizing the undue hardship if required to deposit the demanded amount. The Commissioner's failure to address these aspects was noted, indicating a lack of consideration for the petitioner's circumstances.

3. Regarding the limitation period under Section 11A, the petitioner argued that there was no suppression of facts as the manufacturing process was disclosed in the classification list. The petitioner maintained that the demand was time-barred, emphasizing that the Commissioner (Appeals) did not address this contention adequately. Previous court decisions were cited to support the petitioner's position on the importance of considering limitation issues in such cases.

In conclusion, the High Court allowed the petition in part, setting aside the order of the Appellate Commissioner and directing a reevaluation considering undue hardship and the limitation period issue in a prima facie manner. The Commissioner (Appeals) was instructed to handle the petitioner's waiver-cum-stay application in accordance with the law within a specified timeframe, emphasizing the need to address all relevant factors, including financial constraints and limitation concerns.