1995 (12) TMI 137 - AT - Central Excise

Summary

Issues:
1. Interpretation of Section 11A of the Central Excises and Salt Act, 1944 regarding the time period for raising a demand.
2. Applicability of exemption under Notification No. 105/80 while working under Rule 56C of the Central Excise Rules, 1944.
3. Allegations of suppression of facts and misstatement of facts by the appellant.
4. Imposition of penalty under Rule 173Q of the Central Excise Rules, 1944.

Analysis:

Issue 1:
The appellant contended that the demand raised under the show cause notice dated 26-3-1983 did not invoke the proviso to Section 11A(1) of the Central Excises and Salt Act, 1944. They argued that the time period for the demand should be limited to six months and not five years. Citing relevant case laws, the appellant claimed that the demand prior to six months from the receipt of the show cause notice was time-barred.

Issue 2:
The Department argued that the benefit of Notification No. 105/80 and the permission to work under Rule 56C could not be availed simultaneously. They contended that the appellant wrongly claimed the benefit of the notification in their classification list while working under Rule 56C, leading to suppression of facts. However, the appellant asserted that the Assistant Collector had approved the classification list despite being aware of the situation, indicating no intention to evade duty.

Issue 3:
The Department did not invoke Rule 173Q of the Central Excise Rules, 1944 in the show cause notice, leading to no penalty being imposed on the appellant. The appellant argued that there was no suppression of facts as all relevant information was known to the Department, including the requests for extension under Rule 56C. The Department's claim of suppression was refuted based on the Assistant Collector's previous order withdrawing a demand due to lack of suppression of facts.

Judgment:
The Tribunal observed that the permission to work under Rule 56C had been granted to the appellant, and the Assistant Collector had approved the classification list during that period. Despite the possibility of denying the benefit of Notification No. 105/80, the Assistant Collector approved the list, indicating no suppression or misstatement of facts by the appellant. The Tribunal concluded that the demand was time-barred, as the extended period was not available to the Department. Therefore, the impugned orders were set aside, and the appeal was accepted without delving into the merits of the case.