2025 (2) TMI 257 - AT - Central Excise

Benefit of the exemption N/N. 6/2006-CE dated 01.03.2006 for supplies made to mega power projects against International Competitive Bidding - Invocation of Extended period of limitation - HELD HAT - Before considering the merits of the case it is necessary to examine the grounds on which extended period of limitation was invoked - The Assistant Commissioner had not examined the question of limitation because he found in favour of the appellant on merits. The Commissioner (Appeals) did not record any findings on the question of limitation. Extended period of limitation - HELD THAT - The extended period of limitation was invoked only on the ground that the appellant by way of willful mis-statement and wrong availment of the said notification by way of mis-representation of facts which came to the knowledge only during the audit invoked extended period of limitation. It is a well-settled principal that extended period of limitation cannot be invoked unless one of the five elements necessary to invoke it viz. fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty is established. In this case there are no details let alone evidence in the SCN of either willful mis-statement or mis-representation of facts. There was no ground to invoke extended period of limitation. The entire period of demand from June 2010 to October 2010 was beyond the normal period of limitation and was time-barred. Therefore it is not necessary to examine the merits of the case. Appeal allowed.

2015 (7) TMI 225 - AT

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

Whether the appellant, M/s Shape Engineering Co. (P) Ltd., was entitled to the benefit of the exemption Notification No. 6/2006-CE dated 01.03.2006 for supplies made to mega power projects against International Competitive Bidding.
Whether the invocation of the extended period of limitation in the show cause notice was justified under the Central Excise Act, 1944.

ISSUE-WISE DETAILED ANALYSIS

1. Entitlement to Exemption Notification No. 6/2006-CE:

Relevant Legal Framework and Precedents: The exemption under Notification No. 6/2006-CE was available for supplies to mega power projects, provided certain conditions were fulfilled. The appellant claimed this exemption for parts of turbines supplied as a sub-contractor to M/s BHEL.
Court's Interpretation and Reasoning: The Assistant Commissioner initially dropped the proceedings against the appellant based on a precedent involving M/s BHEL Ranipur Haridwar, where the exemption was allowed. However, the Commissioner (Appeals) reversed this decision, distinguishing the case on the grounds that the prior CESTAT order pertained to the reversal of Cenvat credit, not the non-payment of duty.
Application of Law to Facts: The Tribunal did not delve into the merits of the exemption entitlement because it found the demand time-barred due to the improper invocation of the extended period of limitation.

2. Invocation of Extended Period of Limitation:

Relevant Legal Framework: Under Section 11A of the Central Excise Act, 1944, the extended period of limitation can be invoked only if there is evidence of fraud, collusion, willful mis-statement, suppression of facts, or violation of the Act or Rules with an intent to evade duty.
Court's Interpretation and Reasoning: The Tribunal noted that the show cause notice alleged willful mis-statement and mis-representation of facts by the appellant, which was discovered during an audit. However, it emphasized that the notice lacked specific details or evidence to substantiate these allegations, which are prerequisites for invoking the extended period.
Key Evidence and Findings: The Tribunal found no evidence in the show cause notice to support the claim of willful mis-statement or mis-representation. The absence of such evidence rendered the invocation of the extended period unjustified.
Application of Law to Facts: Since the entire demand period from June 2010 to October 2010 fell beyond the normal limitation period and no valid grounds were established for the extended period, the Tribunal concluded that the demand was time-barred.
Treatment of Competing Arguments: The Tribunal did not need to address the substantive arguments regarding the exemption entitlement due to the finding on the limitation issue.

SIGNIFICANT HOLDINGS

Core Principles Established: The judgment reinforces the principle that the extended period of limitation under the Central Excise Act cannot be invoked without clear evidence of one of the five necessary elements, such as willful mis-statement or suppression of facts.
Final Determinations on Each Issue: The Tribunal set aside the impugned order of the Commissioner (Appeals) and allowed the appeal, granting consequential relief to the appellant. The demand for central excise duty was deemed time-barred due to the improper invocation of the extended period of limitation.
Verbatim Quotes of Crucial Legal Reasoning: "It is a well-settled principal that extended period of limitation cannot be invoked unless one of the five elements necessary to invoke it viz., fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty is established."

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