2000 (8) TMI 410 - AT - Central Excise

Summary

Issues:
1. Duty demand confirmation against appellants for non-accountal of tobacco and not manufacturing cigarettes according to input-output norms.
2. Imposition of penalties under Section 11AC of the Central Excise Act and Rule 209 of the Central Excise Rules.
3. Time-barred demand due to multiple show cause notices issued for the same period and ground.

Analysis:
1. The appeal was filed against the order-in-original confirming duty demand of Rs. 6,77,737.96 for non-accountal of tobacco and Rs. 19,17,766.28 for not adhering to input-output norms in manufacturing cigarettes. Penalties of Rs. 25,94,500.00 under Section 11AC and Rs. 5 lakh under Rule 209 were imposed. The appellants argued that duty was demanded for a specific period and multiple show cause notices were issued for the same grounds earlier, making the demand time-barred due to lack of suppression or misdeclaration.

2. The counsel for the appellants contended that prior show cause notices were adjudicated by the Additional Commissioner, Vadodara, based on the difference in cut-tobacco consumption for cigarette manufacturing. The present notice invoked Section 11A of the Central Excise Act for the same period and grounds covered in the earlier notices. The appellants argued that as the department was aware of the facts during the prior adjudications, the extended period under Section 11A could not be applied, rendering the demand time-barred.

3. The Revenue's representative stated that irregularities were found during verification regarding the tobacco received under a concessional duty notification. However, the Tribunal found that the demand in the present notice was based on the same grounds covered in the earlier notices, where duty was demanded for not using cut-tobacco as intended. As the facts were known to the department previously, the extended period under Section 11A could not be invoked, leading to the conclusion that the demand was time-barred. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants.