2006 (3) TMI 14 - AT - Central Excise

Central Excise Stock found in excess in the appellant factory which was not accounted in statutory book records (2) Manufacturing loss (3) Show cause notice is time-barred (4) Demand (5) Limitation

Summary

Issues:
1. Confirmation of demand, penalty imposition, and goods confiscation upheld in Order-in-Appeal.
2. Time-barred claim by the appellant regarding show cause notice issuance.
3. Validity of the show cause notice for demand of duty and confiscation of goods seized.

Analysis:
1. The appeal was filed against the Order-in-Appeal upholding the confirmation of demand, penalty imposition, and goods confiscation. The appellant's factory was visited, excess goods were found unaccounted in statutory records, and a show cause notice was issued for confiscation of such goods and demand of duty for goods allegedly cleared without payment of Central Excise duty. The basis for the demand was the excess consumption of raw material and losses exceeding industry norms.

2. The appellant contended that the show cause notice issued on 29-1-1998 was time-barred as it was handed over on 9-3-1998, beyond the six-month period for confiscation of seized goods. The appellant also argued that the demand for goods removed without duty payment for the period 1-1-1997 to 1-8-1997 was time-barred. The first appellate authority dismissed the time-bar claim, but the Tribunal held that the question of time-bar could be raised at any stage as it is a legal issue fundamental to the proceedings.

3. The Tribunal found that the show cause notice was indeed time-barred for both the demand of duty and the confiscation of seized goods. The appellant's claim of high losses in manufacturing was known to the authorities since 22-8-1996, yet the notice was issued only on 29-1-1998. As a result, the appeal was allowed solely on the ground of time-bar, setting aside the Order-in-Appeal with consequential relief to the appellant. The judgment was dictated and pronounced in open court.