1993 (2) TMI 201 - AT - Central Excise

Summary

Issues:
1. Time limitation for demands confirmed by the Asstt. Collector.
2. Validity of extended period under Rule 56A(5)(i) for the Department.

Analysis:
The judgment pertains to an appeal from the revenue regarding demands confirmed by the Asstt. Collector for specific periods. The main issue is whether the demands fall within the time limit and if the extended period under Rule 56A(5)(i) is applicable. The respondents, manufacturers of transformers, imported duty-paid components under a proforma credit procedure but were found to have taken credit for items without proper permission. The Asstt. Collector confirmed duty demands, alleging wilful misstatement and suppression of facts, justifying the extended period under Rule 56A(5). The Collector (Appeals) agreed that the items were not covered by valid permission but allowed the appeals on the grounds of time bar. The Revenue appealed against this decision.

During the proceedings, it was argued that the items were not covered by permission, constituting a violation of Rule 56A, justifying the application of the extended period. However, it was acknowledged that the disputed inputs were eligible for proforma credit under T.I. 68. The crux of the argument was whether the verification of permission should have been done at the point of taking credit or could be verified at any time. The judgment rejected this argument, stating that the demands should be considered time-barred as the verification was not conducted within the prescribed six-month period. The court emphasized that the intention to evade duty or violate rules must be present to justify invoking the extended period, which was not the case here. As the disputed inputs were eligible for credit and there was no evidence of evasion or suppression, the appeal from the Revenue was dismissed.

In conclusion, the judgment clarifies the importance of timely verification of permissions and the necessity of intent to evade duty for invoking the extended period under Rule 56A(5)(i). The decision highlights that mere absence of permission does not automatically warrant the application of the extended period if there is no evidence of intentional wrongdoing or violation of rules.