1997 (2) TMI 262 - AT - Central Excise

Summary

Issues:
1. Calculation of limitation period for demand of duty on disputed molasses.
2. Consideration of suppression of information or misstatement by the assessee.

Analysis:

Issue 1: Calculation of limitation period for demand of duty on disputed molasses
The appeal was filed against the order of the ld. Collector (Appeals) who held that the demand of duty on the disputed molasses was issued within the prescribed limitation period. The ld. Collector (Appeals) referred to Section 11A(3)(ii)(c) and ruled that the demand issued on 20-3-1989 was within six months from the date of the Collector's direction on 2-1-1989. The appellants had stored molasses in kutcha pits due to space constraints and had informed the Central Excise Authorities about it. The show cause notice was issued on 17th October 1989 for stocks lying on 28-2-1989. The lower authorities extended the period beyond six months from the date of permission withdrawal to store molasses in kutcha pits. The appellants argued that the show cause notice was time-barred as it was issued beyond the six-month limitation period.

Issue 2: Consideration of suppression of information or misstatement by the assessee
The appellants contended that they had consistently informed the department about storing molasses in kutcha pits due to space constraints. The appellants had written letters dated 27th Dec. 1987 and 28-11-1988 seeking permission for the same. The department was aware of the situation as reflected in the RT 12 returns. The ld. DR for the respondent argued that the limitation period should be counted from the date of permission withdrawal on 2-1-1989. However, the demand issued on 20-3-1989 lacked supporting documentation. The Tribunal found that the appellants had not suppressed any information or made any misstatements regarding the storage of molasses. The Tribunal held that complete and full information had been provided to the department, and therefore, the demand was time-barred.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellants. The Tribunal held that the demand for duty on the disputed molasses was hit by limitation as there was no suppression of information or misstatement by the assessee. Consequential relief, if applicable, was directed to be granted to the appellants in accordance with the law.