2010 (9) TMI 73 - AT - Central Excise

Limitation period- Assessee submitted that the demand was barred by limitation. Tribunal referred to an earlier case in which it was held that where the disputed issue is referred to Larger Bench, longer period cannot be invoked against the assessee and penalty cannot be imposed. By following the same, Court upheld the demand within the period of limitation and beyond the period of limitation was set aside. Penalty imposed upon the assessee was also set aside.

Summary

Issues:
1. Pre-deposit of penalty
2. Enhancement of value of physicians samples
3. Barred by limitation
4. Interpretation of Board Circular
5. Application of Section 11A
6. Imposition of penalty

Pre-deposit of penalty:
The Tribunal dispensed with the condition of pre-deposit of penalty since the appellants had already deposited the entire duty confirmed against them. This decision allowed them to proceed with the appeal without the pre-deposit requirement.

Enhancement of value of physicians samples:
The demand was confirmed by enhancing the value of physicians samples based on the pro-rata price of comparable packs of medicines. The advocate for the appellant acknowledged that the issue had been previously decided by a Larger Bench decision, and argued that the demand raised beyond the normal limitation period was barred by limitation.

Barred by limitation:
The appellant contended that the demand raised for the period February 2005 to January 2007 was time-barred. The Tribunal considered previous decisions and held that if a disputed issue was referred to a Larger Bench, the longer period of limitation could not be invoked against the assessee, and penalties could not be imposed.

Interpretation of Board Circular:
The Tribunal referred to a decision in the case of M/s Marsha Pharma Ltd. and highlighted that even after the issuance of a circular by the Board, if contradictory views existed, the matter was not considered settled. The Tribunal emphasized that different interpretations were possible, and therefore, the extended period could not be invoked, leading to the setting aside of penalties.

Application of Section 11A:
The Tribunal upheld the demand within the period of limitation while setting aside the demand beyond the limitation period. It was held that when a disputed issue was referred to a Larger Bench, the longer period could not be invoked against the assessee, and penalties could not be imposed.

Imposition of penalty:
Following the decision in a previous matter, the Tribunal set aside the penalty imposed on the appellant. The Tribunal concluded that where a disputed issue was referred to a Larger Bench, penalties could not be imposed, and the demand within the period of limitation was upheld while the demand beyond the limitation period was set aside.