1993 (4) TMI 136 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand for short payment of duty under Section 11A of the CESA, 1944.
2. Applicability of Notification No. 120/75 for assessment on invoice value basis.
3. Time bar for raising the demand beyond the extended period under Section 11A of the Act.
4. Allegations of suppression of facts and intentional diversion of attention by the authorities.

Analysis:
1. The appeal challenged the Order-in-Original confirming a demand for short payment of duty. The appellants opted for assessment on invoice value basis under Notification No. 120/75 but paid duty only on conversion charges instead of the assessable value of the goods. The department issued a Show Cause Notice for the demand, which was contested by the appellants on various grounds, including time bar under Section 11A. The authority disbelieved the appellants' contentions and confirmed the demand, holding them not eligible for the notification benefit.

2. The appellants' counsel argued solely on the issue of time bar, contending that the department was aware of the duty payment practice. The department, represented by the SDR, alleged contraventions of statutory provisions and intentional diversion of attention in assessing the RT 12 Returns. The SDR claimed that even if the demand for the earlier period was time-barred, an act of suppression could be attributed to the duty payment for a specific month, making it recoverable.

3. The Tribunal noted that the entire demand was beyond the six-month period as per the Show Cause Notice issued in 1985 for a period in 1983. The authority was aware of the duty payment details through RT 12 Returns and invoices, indicating no concealment or suppression. The argument of suppression due to a missed RT 12 Return for November 1983 was deemed unconvincing, as the practice was consistent, and the department was already aware of the situation. Therefore, the demand was held to be outside the extended period of limitation.

4. The Tribunal found that the reasons cited by the adjudicating authority for invoking the extended period were not legally sustainable. With invoices submitted along with RT 12 Returns, the demand raised beyond six months was deemed impermissible. The order confirming the demand was set aside on the grounds that the extended period was not applicable. Consequently, the appellants were relieved of the demand.