2005 (3) TMI 250 - AT - Central Excise

Summary

Issues involved: Whether the extended period of limitation is invokable for demanding Central Excise duty from the appellant, applicability of exemption under Notification No. 202/88-C.E., and allowance of Modvat credit.

Analysis:

Issue 1: Extended period of limitation
The appellant, a manufacturer of steel tubes and pipes, claimed exemption under Notification No. 202/98-C.E. The department demanded Central Excise duty for the period from 26-3-1990 to 30-3-1992. The appellant argued that they acted in good faith due to a dispute between the department and suppliers regarding product classification. They contended that they disclosed all material facts to the department, preventing any mala fide intention. The Tribunal observed that the department was aware of the appellant's manufacturing activities and exemption availed, thus holding suppression of facts stopped from 22-1-1991. The extended period of limitation was deemed applicable only before this date, rejecting the appellant's argument that self-intimation to the department absolved them of prior suppression.

Issue 2: Applicability of exemption and Modvat credit
The Tribunal had already allowed the appellant Modvat credit in a previous order. The Revenue did not appeal this decision. Therefore, the Commissioner was not permitted to disallow the Modvat credit on new grounds. The duty was to be recalculated considering the price as cum-duty price, following a Supreme Court judgment. The matter was remanded to the Adjudicating Authority for duty re-computation and Modvat credit allowance, with the authority authorized to impose penalties after providing a hearing to the appellant.

In conclusion, the Tribunal upheld the extended period of limitation for demanding Central Excise duty before 22-1-1991 due to suppressed facts. It confirmed the allowance of Modvat credit and directed the re-computation of duty as per Supreme Court guidelines. The appeal was disposed of accordingly.