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1999 (12) TMI 460 - AT - Central Excise
Issues:
1. Liability to duty on clearances made between 1-4-1988 and 31-3-1990. 2. Applicability of the proviso to Section 11A for the period from 24-6-1989 to 31-3-1990. 3. Interpretation of the "relevant date" in Section 11A(1) of the Act. 4. Application of the extended period of five years for duty evasion due to suppression of facts. 5. Determining the limitation period for duty demand from 8-7-1989 onwards. 6. Validity of penalty imposed. 7. Refund of excess duty collected. Analysis: 1. The Collector confirmed the duty demand for clearances made between 1-4-1988 and 31-3-1990 based on a show cause notice invoking the extended five-year period under Section 11A(1) of the Act. 2. The appellant's representative acknowledged the duty liability but disputed the proviso's applicability for the period from 24-6-1989 to 31-3-1990, arguing that the department was informed of the valuation discrepancy on 24-6-1989, and any subsequent duty shortfall was not due to suppression by the appellant. 3. The Collector rejected the appellant's argument, emphasizing that the "relevant date" under Section 11A(1) is crucial, not the date of admission of facts, as clarified in the Nizam Sugar Factory case. The date of departmental awareness is determined when the show cause notice is issued after evaluating relevant material. 4. The extended five-year period applies when duty evasion results from factors like suppression of facts. The department was informed of the valuation error on 23-6-1989, and any duty shortfall until a reasonable period after this date could be attributed to suppression. However, subsequent duty shortages were due to the department's inaction despite being informed by the appellant's partner. 5. Considering a reasonable 15-day period for the department to act after being informed, the limitation for duty demand was set from 8-7-1989 onwards, barring the demand for the period until 31-3-1990. 6. The penalty of Rs 1.00 lac imposed was deemed justified based on the circumstances of the case, requiring no interference. 7. The appeal was partially allowed, directing the department to refund any excess duty collected if permissible under the law.
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