2002 (12) TMI 111 - AT - Central Excise

Summary

Issues:
- Whether the extended time-limit under Section 11A of the Central Excise Act applies to demand excise duty from a company.

Analysis:

Issue 1: Extended Time Limit for Demand of Excise Duty

The appeal concerned the demand for excise duty from a company by the Revenue under the proviso to Section 11A of the Central Excise Act. The Revenue contended that the extended time limit should apply as the company had manufactured and removed excisable goods without paying duty or informing the Central Excise Department. The Commissioner (Appeals) had held that the extended period could not be invoked, citing the company's belief that the goods were not excisable due to purchase orders from the Indian Railways. The Revenue argued that the purchase orders could not be used to establish a bona fide belief of non-excisability and referenced previous tribunal decisions to support their stance.

Issue 2: Bona Fide Belief and Excisability

The company, on the other hand, claimed a bona fide belief in non-excisability based on the purchase orders stating no excise duty was applicable. They argued that the Railways' orders and specific conditions in the tender documents supported their belief. Additionally, they challenged the penalties imposed and sought Modvat credit for input duties paid. The company also referred to a previous tribunal decision regarding cum-duty pricing for duty computation.

Issue 3: Tribunal's Decision and Remand

The Tribunal rejected the company's argument, emphasizing that the purchase orders could not determine excisability, and the company should have consulted the Central Excise Department for clarity. Drawing parallels to a Supreme Court case, the Tribunal found the company's actions indicated an intent to evade duty, justifying the extended time limit for duty demand. However, the Tribunal agreed with the company on duty computation, Modvat credit eligibility, and penalties, remanding the matter for reevaluation by the adjudicating authority.

In conclusion, the appeal by the Revenue and the cross-objection by the company were both disposed of, with the Tribunal upholding the extended time limit for duty demand but directing a reassessment of duty, allowance of Modvat credit, and restrictions on penalties.