2001 (7) TMI 392 - AT - Central Excise

Summary

Issues:
1. Appeal against the Commissioner (Appeals) order on limitation.
2. Interpretation of Section 11A and Rule 223A regarding limitation for demand of duty.
3. Divergent views of the Tribunal on the applicability of limitation under Section 11A to Rule 223A.
4. Referral of the matter to the Larger Bench due to conflicting decisions.

Analysis:
1. The appeal was filed by the Revenue against the Commissioner (Appeals) order allowing the respondent's appeal on the point of limitation. The case involved the demand of duty on shortages found during the respondents' annual stock taking for the years 1986-87 and 1987-88. The Commissioner (Appeals) had relied on previous orders dismissing the case of the Department on grounds of limitation and merits, following the Govt. of India Orders in the Bharat Laundry case.

2. The learned SDR for the Revenue contested the Commissioner (Appeals) findings, arguing that Section 11A and Rule 223A serve different purposes, as established in the Carborundum Universal Limited case. He emphasized that limitation under Section 11A does not apply to situations under Rule 223A, citing the Indian Chrome Metals case to support his stance that no time-limit could be imposed under Rule 223A.

3. The Advocates for the respondents supported the Commissioner (Appeals) decision, citing the Govt. of India Orders in the Bharat Laundry case and the Tribunal's ruling in the Rourkela Steel Plant case. They argued that the demand for duty under Rule 223A is independent of levy and collection under Section 11A, and the issue had been conclusively decided in favor of the respondents.

4. Considering the divergent views within the Tribunal on whether the limitation under Section 11A applies to Rule 223A, the case was referred to the Larger Bench for resolution. The decision highlighted various Tribunal rulings and decisions from different High Courts, indicating conflicting interpretations on the issue. The matter was deemed appropriate for the Larger Bench to decide the disputed legal issue conclusively.