1990 (10) TMI 215 - AT - Central Excise

Summary

Issues:
Appeal challenging decision of Collector of Central Excise (Appeals) regarding demand for deemed credit availed by the respondent company.
Question of limitation raised in appeal.
Applicability of time-limit under Section 11A of Central Excises & Salt Act, 1944 to the case of wrongful availed modvat credit.

Analysis:
The appeal was filed by the Collector of Central Excise, Calcutta-II against the decision of the Collector of Central Excise (Appeals) relating to the demand for deemed credit availed by the respondent company. The Collector (Appeals) had set aside the demand of Rs. 7067.10 confirmed by the Assistant Collector of Central Excise, Howrah South Division, based on the ground of limitation as the notice for the demand was issued late. The appellant argued that the notice was not time-barred as per Rule 571 at that time, and the question of limitation was not raised by the assessee during the adjudication proceedings. The appellant pleaded for setting aside the Collector (Appeals) order and restoring the Assistant Collector's order. Both parties presented their arguments before the Bench, with the appellant emphasizing the time-limit issue and the respondent citing relevant case laws to support their contention on the plea of limitation.

The Tribunal considered the submissions from both sides and addressed the issue of whether the respondents were entitled to raise the plea of limitation in their appeal before the Collector (Appeals) even if it was not raised during the original adjudication proceedings. The Tribunal referred to legal provisions and previous judgments to establish that new grounds, especially questions of law, can be raised during the appeal stage if the facts are not in dispute. The Tribunal highlighted that the Collector (Appeals) has the authority to allow new grounds of appeal if their omission was not wilful or unreasonable. The Tribunal endorsed the right of the respondents to raise the plea of limitation in their appeal, and the Collector (Appeals) was correct in considering this new point.

Regarding the applicability of the time-limit under Section 11A of the Central Excises & Salt Act, 1944 to the case of wrongful availed modvat credit, the Tribunal examined previous decisions and held that even for alleged wrongful availed modvat credit, the notice for recovery should be issued within the timeframe provided under Section 11A. The Tribunal cited relevant judgments and established that the time-limit provisions apply to demands arising from wrongful availment of credit, irrespective of specific rules in place at that time. The Tribunal concluded that the decision of the Collector (Appeals) on the question of limitation was correct, and the appeal was dismissed with consequential reliefs for the respondents. The Cross Objection filed by the respondents was disposed of accordingly, as it did not challenge any points of the Collector (Appeals) orders.

In summary, the Tribunal upheld the Collector (Appeals) decision based on the plea of limitation and established the applicability of time-limit provisions under Section 11A to demands related to wrongful availed modvat credit, dismissing the appeal and providing consequential reliefs for the respondents.