2004 (10) TMI 177 - AT - Central Excise

Summary

Issues:
1. Violation of Principles of Natural Justice regarding the withdrawal of the facility for fortnightly payment of duty.
2. Allegation of irregular availment of credit and recovery of duty invoking a larger period.
3. Applicability of intention to evade duty and demands being barred by time.

Analysis:
1. The appeal involved a challenge to the withdrawal of the facility for fortnightly payment of duty without proper authorization. The appellants argued that the Superintendent of Central Excise did not have the jurisdiction to cancel the facility suo motu and that the order should have been passed by the Proper Officer, as per Rule 173G(1)(e) of the Central Excise Rules. They contended that this action violated the Principles of Natural Justice, citing a judgment from the Punjab & Haryana High Court. The Tribunal agreed with the appellants, emphasizing that the withdrawal of the facility without an order from the Deputy Commissioner or Assistant Commissioner was against the law and Principles of Natural Justice. The Tribunal relied on the Punjab & Haryana High Court judgment and set aside the impugned order, ruling in favor of the appellants.

2. The issue of irregular availment of credit and recovery of duty invoking a larger period was also addressed. The appellants had followed the procedure under Rule 173G for payment of duty, but the authorities alleged that they had defaulted in duty payments, leading to the suspension of the fortnightly payment facility. The Tribunal noted that the appellants had deposited duty through PLA and availed Cenvat credit, which could have led to revenue neutrality. Citing the Supreme Court judgment in T.N. Dadha Pharmaceuticals case, the Tribunal held that there was no intention to evade duty, and therefore, the demands were barred by time. The Tribunal found merit in the appellants' arguments and allowed the appeal, providing consequential relief.

3. The Tribunal considered the applicability of intention to evade duty and the demands being barred by time. It was established that the appellants' payment of duty through PLA and availing of Cenvat credit indicated no intention to evade duty. Moreover, the Tribunal found that the demands were indeed barred by time, further supporting the appellants' case. Rulings from various cases were cited to strengthen the appellants' position, leading to the Tribunal allowing the appeal and providing relief to the appellants based on the legal principles and judgments discussed during the proceedings.