1995 (9) TMI 141 - AT - Central Excise

Summary

Issues:
Time-barred demand under Rule 9(2) of Central Excises and Salt Act, 1944.

Analysis:
The appeal was against an order-in-original issued by the Collector of Central Excise, Jaipur, regarding the duty demand on goods manufactured and cleared by the appellants for the construction of an Aerial Ropeway. The appellants had a Cement factory and limestone quarries, and a ropeway was installed to transport limestones to the factory. The duty demand was based on the alleged manufacturing of certain goods on the appellants' premises for the ropeway construction.

The main argument raised by the Ld. Advocate was regarding the time bar. It was contended that the show cause notice was issued almost two years after the department's knowledge of the ropeway construction, and therefore, the extended period under Section 11A of the Central Excises and Salt Act, 1944 could not be invoked. The department's delay in issuing the notice was highlighted, emphasizing that the construction of the ropeway was visible since 1979, and the necessary information was provided to the department in 1982.

The Ld. D.R. reiterated the department's stance that the investigation took time, leading to the delayed issuance of the show cause notice. However, the Tribunal analyzed the show cause notice and found that it did not indicate any basis for invoking the extended period. The notice did not allege any fraud, collusion, wilful misstatement, suppression of facts, or contravention, as required under the law for invoking the extended period for demand.

Referring to legal precedents, including C.C.E. v. H.M.M. Limited and Pushpam Pharmaceuticals Company v. Collector of Central Excise, the Tribunal emphasized the strict interpretation of the proviso to Section 11A, which requires specific allegations of fraud, collusion, wilful default, or suppression of facts to invoke the extended period for demand. Since the show cause notice did not contain such allegations, the Tribunal held that the demand was time-barred.

Therefore, without delving into the merits of the case, the Tribunal concluded that the demand was time-barred and set aside the impugned order, allowing the appeal in favor of the appellants.