1991 (6) TMI 146 - AT - Central Excise

Summary

Issues:
1. Whether the demand raised by the Department was hit by the period of limitation.
2. Whether the show cause notice contained allegations of wilful suppression or fraud.
3. Whether the order of the Collector (Appeals) was justified in setting aside the demands confirmed by the Assistant Collector.

Detailed Analysis:
1. The appeal was filed by the Department against an order setting aside demands confirmed by the Assistant Collector due to the period of limitation. The Department argued that the show cause notice issued in August 1982 raised a demand based on testing samples from February 1981, indicating misdeclaration. The Department contended that even though the notice did not explicitly mention suppression, the wording implied it. The Department highlighted that the respondents made corrections without informing authorities, suggesting suppression existed. The Collector (Appeals) rejected the appeal solely on the ground of limitation without considering the merits of the issue.

2. The Respondents' advocate supported the Collector (Appeals)'s decision, emphasizing that the notice did not clearly allege suppression or fraud. He argued that the Department suspected misdeclaration as early as January 1981 and did not take action until August 1982, beyond the six-month period without mentioning suppression in the notice. The advocate contended that the order of the Collector (Appeals) was just and proper, given the lack of explicit allegations in the show cause notice.

3. The Judge analyzed the submissions and the notice's wording to determine if suppression was alleged to justify invoking the extended period. The Judge noted that the wording of the notice did not explicitly allege suppression, and the Department's suspicions arose well before the notice was issued. The Judge found that the Department delayed action unreasonably, waiting over a year to issue the show cause notice after confirming suspicions. Ultimately, the Judge agreed with the Collector (Appeals) that there was no allegation of suppression in the notice, leading to the rejection of the appeal. The Judge upheld the Collector (Appeals)'s decision as just and proper, concluding that no interference was warranted, and ordered consequential relief to follow.