1998 (11) TMI 276 - AT - Central Excise

Summary

Issues:
1. Demand of Central Excise Duty on Absolute Alcohol.
2. Imposition of penalty on the appellants.
3. Application of extended period of limitation for demanding duty.
4. Disclosure of manufacturing Absolute Alcohol to the Department.
5. Mis-statement of facts by the appellants in the classification list.
6. Interpretation of Section 11A(1) of the Central Excise Act.

Analysis:

1. The appeal was filed against the order demanding Central Excise Duty on Absolute Alcohol cleared during a specific period. The Collector confirmed a reduced demand, imposed a penalty, and dropped the demand for rectified spirit. The appellant argued that the demand was time-barred as there was no fraud or suppression of facts, highlighting their belief in non-excisability. They cited maintaining records and previous classification lists as evidence. The appellant contended that the Department was aware of Absolute Alcohol production, supported by a letter clarifying non-duty on Absolute Alcohol. Legal precedents were cited to support the argument against invoking extended limitation for demanding duty.

2. The Respondent countered by stating that the appellants should have disclosed Absolute Alcohol manufacture to the Department, alleging intentional evasion of duty. The Respondent emphasized mis-statement in the classification list and invoked the extended period of limitation under Section 11A(1) of the Central Excise Act.

3. The Tribunal considered both arguments and referenced legal precedents. It was noted that the appellants had disclosed Absolute Alcohol production in previous classification lists, stating non-liability for Central Excise Duty. The Tribunal found no deliberate suppression of facts by the appellants, as the Department could have verified the product independently. Citing a previous Tribunal decision and a letter clarifying non-duty on Absolute Alcohol, the Tribunal concluded that the demand was time-barred. Therefore, the appeal was allowed, setting aside the demand and penalty.

This judgment highlights the importance of disclosure, the absence of deliberate suppression, and the interpretation of law in determining the applicability of extended limitation periods in Central Excise cases.