2005 (7) TMI 18 - AT - Central Excise

Central Excise Demand Larger period of limitation not invokable as there is no allegation of fraud, suppression or misstatement of facts etc in show cause notice

Summary

Issues: Correct payment of duty on waste/scrap of cast alloy magnets cleared from one unit to another.

The judgment pertains to an appeal involving the correct payment of duty on waste/scrap of cast alloy magnets cleared from one manufacturing unit to another. The appellants, engaged in magnet manufacturing, have units in Borivali and Daman. The Borivali unit produces cast alloy magnets and permanent magnets, with some cast alloy magnets transferred to the Daman unit after duty payment. Both units avail Modvat credit for duty paid inputs. The issue in question concerns the duty payment on waste/scrap of cast alloy magnets moved from the Daman unit to the Borivali unit.

The Tribunal noted that the Show Cause Notice invoked an extended period without alleging suppression of facts, fraud, or misstatement. Citing Supreme Court decisions, the appellants argued that demanding duty beyond six months without such allegations was impermissible. Referring to specific cases like CCE Vs. HMM Ltd, the Tribunal emphasized the importance of informing the party of the allegations to ensure natural justice. The Tribunal found the demand time-barred due to lack of specific allegations and set it aside, ruling in favor of the appellants solely on the ground of time limitation.

In conclusion, the Tribunal allowed the appeal based on the time bar issue, granting consequential relief as per the law. The judgment highlights the significance of adherence to natural justice principles and the necessity of clearly informing the party of allegations in cases involving extended periods for demand of duty, ultimately leading to the demand being set aside in this instance.