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2024 (4) TMI 959 - AT - Central ExciseNon-payment of duty fixed for the month of March 2000 - Compounded Levy Scheme - invoking the proviso to Section 11A of the Central Excise Act, 1944 alleging suppression of fact - extended period of limitation - HELD THAT - It is observed from the Show Cause Notice that the demand has been raised by invoking the provisions of Section 11A of the Act and penalty has been imposed for contravention of the provisions of Section 11A on the ground that the appellant had mala fide intention to evade the payment of duty. The appellant has declared the non-payment of duty for the month of March 2000 in the return filed by them. They have not suppressed any information from the Department. The Show Cause Notice was issued by invoking the proviso under Section 11A on the ground that the appellant had deliberately not paid Central Excise Duty. No suppression of fact with intention to evade payment of duty exists in this case. The appellant has declared all the information in their RT-12 return and the Notice has also been issued upon scrutiny of the RT-12 return filed by the appellant for the month of March 2000. Accordingly, the extended period of limitation as provided under proviso to Section 11A is not invokable in the present case. The demand has been raised by invoking the proviso to Section 11A of the Act. As the ingredients for invoking proviso to Section 11A does not exist in this case, the demand confirmed in the impugned order is not sustainable on the ground of limitation. The demand confirmed in the impugned order set aside on the ground of limitation - appeal allowed.
Issues:
The appeal against the Order-in-Appeal upholding the demand of duty and penalty under Rule 96ZP (3) of the Central Excise Rules, 1944. Issue 1: Duty Payment under Compounded Levy Scheme The appellant, working under the Compounded Levy Scheme u/s 3A of the Central Excise Act, 1944, disputed the demand of duty for March 2000, contending that since their factory was closed for the entire month, no duty was payable. They argued that the demand, raised beyond the normal limitation period, should be set aside due to non-suppression of information. Judgment on Issue 1: The Tribunal noted that the appellant had not paid duty for March 2000 as their factory was closed, which was reflected in their RT-12 return. The Departmental Representative argued that there was no time limit for demanding duty under the Compounded Levy Scheme. However, the Tribunal held that the demand for March 2000, raised under Section 11A, was barred by limitation as the appellant had not suppressed any information. The demand was set aside on the ground of limitation. Issue 2: Invocation of Section 11A and Penalty The appellant was alleged to have contravened Section 11A by not paying the duty for March 2000 with mala fide intention. The Department contended that the demand under Rule 96ZP (3) was legally valid and not time-barred. Judgment on Issue 2: The Show Cause Notice invoked Section 11A alleging deliberate non-payment of duty. However, the Tribunal found that the appellant had disclosed the non-payment in their return and had not suppressed any information. As the requirements for invoking Section 11A were not met, the demand was deemed unsustainable on limitation grounds. The Tribunal distinguished a cited Supreme Court case, stating it was not applicable to the present situation. Consequently, the demand was set aside, and the appeal was allowed. This judgment by the Appellate Tribunal CESTAT KOLKATA pertains to a dispute over duty payment under the Compounded Levy Scheme and the invocation of Section 11A for non-payment of duty for a specific month. The Tribunal ruled in favor of the appellant, setting aside the demand on the grounds of limitation and lack of suppression of information.
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