1990 (8) TMI 264 - AT - Central Excise

Summary

Issues:
1. Time-barred demand under the proviso to sub-section (1) of Sec. 11A of the Central Excises and Salt Act, 1944.
2. Validity of the declaration made by M/s. Polymer Corporation of Gujarat Ltd. and permission granted for proforma credit.
3. Applicability of the extended period for raising the demand.

Analysis:
1. The appeal challenged the Order-in-Original raising a demand under the proviso to Sec. 11A of the Central Excises and Salt Act, alleging unauthorized availing of proforma credit of central excise duty. The appellant argued that the demand was time-barred, citing the amalgamation of entities and transfer of rights. The appellant contended that the department was aware of the merger, and no suppression occurred, thus invoking the extended period was unjustified. The Tribunal found that the department was informed of the amalgamation, and no deliberate suppression existed. Consequently, the demand was deemed time-barred, and the order was set aside.

2. The appellant's advocate argued that the declaration and permission obtained for proforma credit were valid due to the merger sanctioned by the High Court. The department contended that obtaining permission under Rule 56A was mandatory, and the appellant could not rely on Polymer Corporation's declaration. However, the Tribunal observed that the department was aware of the amalgamation and had permitted the transfer of proforma credit, indicating acknowledgment of the appellant's entitlement. As no deliberate suppression was found, the extended period was inapplicable, leading to the appeal's allowance solely on the time-bar issue.

3. The Tribunal emphasized that the department's knowledge of the merger and subsequent actions, such as license transfers and permission for credit transfer, demonstrated awareness of the situation. As there was no intentional misstatement or suppression, the extended period could not be invoked. Therefore, the demand was considered time-barred, rendering it unenforceable. The decision to set aside the Additional Collector's order was based solely on the time-bar issue, making further analysis unnecessary.