1991 (8) TMI 180 - AT - Central Excise

Summary

Issues:
Time-bar aspect of the demand confirmed under Notification No. 43/82.

Detailed Analysis:

1. Background and Appeal Details:
The appeal before the Appellate Tribunal CEGAT, Bombay was against the Order-in-Original No. 7/Demand/91 dated 16-12-1990 passed by the Additional Collector of Central Excise, Vadodara. The appellant, a manufacturer of S.O. Dyes, was availing exemption under Notification No. 43/82. The dispute arose when a show cause notice was issued, demanding a sum of Rs. 38,282.42, alleging that the appellant was not eligible for exemption during the financial year April 1985 - March 1986 due to the sanction of a refund claim. The issue revolved around the time-bar aspect of the demand.

2. Arguments of the Appellant:
The appellant's counsel argued that the refund claim was known to the department, as it was considered by the Assistant Collector, who approved the exemption. The appellant contended that there was no attempt to suppress any material facts, as the claim for refund was within the department's knowledge. The appellant maintained that the extended period for demand was not applicable in this case, and the entire demand was barred by limitation.

3. Arguments of the Respondent:
On the other hand, the JDR representing the respondent argued that the refunded amount should be added to the assessable value, affecting the eligibility for exemption. The respondent contended that the extended period was applicable since the crucial factor determining exemption eligibility was not disclosed to the department.

4. Tribunal's Decision:
After hearing both sides, the Tribunal found that the allegation of suppression was based on the appellant's failure to disclose the refund claim in the classification list. However, the Tribunal noted that the department was aware of the refund claim, as it was processed by the same Assistant Collector who approved the exemption. The Tribunal concluded that there was no suppression of material facts and that all necessary particulars for exemption eligibility were provided. Therefore, the Tribunal held that the demand was time-barred and set aside the Additional Collector's order.

5. Disposal of Appeal and Stay Application:
Since the appeal was allowed on the ground of time-bar, the stay application was also disposed of accordingly.

This judgment highlights the importance of timely disclosure of relevant information to tax authorities and the implications of time-bar provisions in tax disputes.