2005 (5) TMI 116 - AT - Central Excise

Summary

Issues involved:
- Whether the extended period of limitation is applicable for demanding duty based on the small scale exemption Notification.
- Whether the value of clearance of goods exported to Nepal should be included in the aggregate value of clearance for home consumption.

Analysis:

1. Issue 1 - Extended period of limitation for demanding duty:
The appeal filed questioned the invocation of the extended period of limitation for demanding duty by denying the small scale exemption Notification benefit due to the value of clearance exceeding Rs. 3 crores during the financial year 1999-2000. The advocate argued that the Appellants believed that goods exported to Nepal under bond were not subject to excise duty, hence their value should not be included in the aggregate value of clearance. However, the Tribunal found no substance in this argument as goods exported under bond are liable to Central Excise duty. The failure to include the value of clearance of goods exported to Nepal in the RT 12 Returns indicated a suppression of material facts, justifying the invocability of the extended period of limitation. Consequently, the Tribunal upheld the demand of duty.

2. Issue 2 - Inclusion of value of goods exported to Nepal in aggregate clearance value:
The argument revolved around whether the value of clearance of goods exported to Nepal should be included in the aggregate value of clearance for home consumption. The advocate contended that as per Explanation G to the Notification, the value of goods exported to Nepal should only be included if excise duty is payable. However, the Tribunal noted that the Appellants did not include the value of clearance of goods exported to Nepal in their RT 12 Returns, indicating a suppression of material facts. As a result, the Tribunal concluded that the extended period of limitation was applicable, upholding the duty demand. Despite this, the Tribunal agreed with the advocate that an equal amount of penalty was not warranted, reducing the penalty to Rs. One lakh only.

In conclusion, the Tribunal dismissed the appeal, upheld the duty demand due to the suppressed material facts regarding the value of goods exported to Nepal, and reduced the penalty imposed on the Appellants.