2001 (8) TMI 250 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty demand against M/s. Orissa Construction Corporation Ltd. (OCCL) and imposition of a personal penalty.
2. Argument on the point of limitation regarding the show cause notice issued to OCCL.
3. Show cause notice issued to M/s. National Thermal Power Corporation Ltd. (NTPC) and penalty imposed under Rule 209A of Central Excise Rules, 1944.
4. Legal position regarding the manufacture of excisable goods by OCCL or NTPC.
5. Revenue's awareness of activities by both appellants and the delay in issuing the show cause notice.
6. Conclusion on limitation and justification of penalties imposed.

Analysis:

1. The judgment pertains to the confirmation of a duty demand against OCCL and the imposition of a personal penalty, along with a penalty on NTPC under Rule 209A of Central Excise Rules, 1944. The appeals arose from the same order of the Commissioner confirming the duty demand of Rs. 82,11,690 against OCCL and imposing an equivalent penalty under Section 11AC, along with interest under Section 11AB of the Central Excise Act, 1944. Additionally, a penalty of Rs. 85.00 lakh was imposed on NTPC.

2. The issue of limitation was raised concerning the show cause notice issued to OCCL. The contention was that the entire demand of duty was barred by the limitation of six months under Section 11A of the Act. The argument focused on the absence of suppression or misstatement by OCCL to evade payment of duty, highlighting the correspondence between OCCL and the Department.

3. A show cause notice was issued to NTPC, alleging them as the manufacturer of excisable goods and imposing a penalty under Rule 209A. However, subsequent clarification by the Joint Commissioner admitted the mistake in considering NTPC as the manufacturer, indicating that OCCL was the actual manufacturer liable to pay Central Excise duty.

4. The judgment analyzed the legal position regarding the manufacture of excisable goods by OCCL or NTPC. It highlighted the confusion within the Revenue regarding the manufacturing entity and the correspondence reflecting OCCL's stance that NTPC should pay the duty if leviable.

5. The Revenue's awareness of the activities of both appellants, dating back to 1993, was emphasized. Despite this awareness, there was a delay of about three years in issuing the show cause notice, invoking a longer period of limitation. The judgment concluded that no suppression or intent to evade payment of duty could be attributed to OCCL, leading to the demand being barred by limitation.

6. Consequently, the impugned order was set aside on the point of limitation, and the appeals were allowed with consequential reliefs to the appellants. The imposition of penalties on both appellants was deemed unjustified based on the findings regarding limitation and the Revenue's awareness of the situation.