2006 (8) TMI 50 - HC - Central Excise

Central Excise SCN issued to assessee on 24.6.93 for the disputed period Jan to June 1988 Contention raised by counsel for revenue that returns for June 1986 were to be filed by July 5, 1988 If contention accepted only one month fall within extended period of limitation and not any prior period W.P. rejected in view of smallness of amount

Summary

Issues:
1. Calculation of the last date for service of Show Cause Notice in relation to the definition of 'relevant date' under Section 11(3)(ii)(a)(B) of the Central Excise Act, 1944.
2. Entertaining new/additional grounds in defense by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) which were not raised during the adjudication proceedings.

Analysis:
1. The case involved a show cause notice issued to the assessee proposing a demand of Rs. 79,884.31 under Rule 9(2) of the Central Excise Rules for the period January 1988 to June 1988. The Collector confirmed the demand and imposed a penalty. The Tribunal accepted the appeal, ruling that the demand was beyond the extended period of limitation. The revenue contended that the show cause notice was not time-barred as returns for June 1986 were due by July 5, 1988. However, the Court rejected this argument, stating that only one month fell within the extended period of limitation, which did not cover the entire disputed period. The Court noted the small amount involved and declined to interfere with the Tribunal's decision, ultimately rejecting the revenue's petition.

2. The second issue raised was whether CEGAT erred in considering new/additional grounds in defense that were not raised during the adjudication proceedings. However, the Court did not delve into this issue as it focused primarily on the time-barred nature of the show cause notice. The Court's decision to reject the revenue's petition was based on the lack of merit in their argument regarding the limitation period, and as a result, the issue of entertaining new grounds was not extensively addressed in the judgment.

In conclusion, the High Court of Punjab & Haryana dismissed the revenue's petition under Section 35H(1) of the Central Excise Act, 1944, as it found no justification to interfere with the Tribunal's decision regarding the time-barred nature of the show cause notice. The Court's decision was influenced by the limited amount at stake and the specific timeline involved in the case, leading to the rejection of the petition and the application for condonation of delay in refiling.