1999 (9) TMI 280 - AT - Central Excise

Summary

Issues:
Time bar for issuing show cause notice, jurisdiction, and merits of the case.

Analysis:
1. Time Bar for Issuing Show Cause Notice:
The appellant challenged the order based on the time bar, arguing that the extended period of 5 years for issuing the show cause notice was not applicable in this case. They contended that there was no suppression of facts or intent to evade duty. Previous orders in the appellant's favor from different Commissioners supported their claim that they were not liable for duty. The appellant also highlighted that the Department's awareness of the proposed installation of the Turbo Alternator Set (TAS) further negated the charge of suppression. The Tribunal agreed with the appellant, stating that the demand was raised beyond the permissible time limit and quashed the duty demand, penalties, and confiscation.

2. Jurisdiction:
The Revenue argued that as the appellant did not obtain a license, the manufacture of TAS remained unknown to the Central Excise authorities. They emphasized that the appellant's responsibility to obtain a license was not absolved by information provided by a third party. However, the Tribunal found that the appellant's belief that they were not liable for duty was reasonable, given the previous orders in their favor and the lack of response from the Central Excise Authorities despite being informed about the proposed assembly of TAS. The Tribunal concluded that the appellant was not avoiding obtaining a Central Excise License with the intent to evade duty, thus supporting the appellant's position.

3. Merits of the Case:
The appellant also argued that the duty paid on components would have been available as Modvat Credit for paying duty on the TAS, indicating no intention to evade payment. They cited precedents to support their case. The Tribunal did not delve into the other issues raised by the appellant, as the appeal was allowed on the grounds of time bar. Consequently, the appeal was allowed, and all related penalties and confiscation were set aside.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the demand for duty was time-barred, and there was no suppression of facts or intent to evade duty. The appellant's belief that they were not liable for duty was considered reasonable, given the circumstances, leading to the appeal being allowed with consequential relief.