2001 (4) TMI 499 - AT - Central Excise

Summary

Issues Involved:
1. Demand for differential duty under Section 11A of the Central Excise Act, 1944.
2. Imposition of penalty under Rule 173Q of Central Excise Rules, 1944.
3. Confiscation of land, building, plant, and machinery under Rule 173Q.
4. Imposition of penalty on the Chairman under Rule 209A.
5. Time-barred nature of the show cause notice.
6. Eligibility for exemption under Notification No. 154/90-C.E., dated 1-11-1990.
7. Alleged suppression of facts by the assessee.

Detailed Analysis:

1. Demand for Differential Duty:
The show cause notice demanded differential duty of Rs. 1,87,23,165.04 for the period from 1-7-1990 to 23-7-1991. The respondents argued that the demand was time-barred since the classification lists and RT 12 returns were duly approved by the Department without objection. Additionally, previous show cause notices on similar issues were dropped by the Collector of Central Excise, Hyderabad.

2. Imposition of Penalty under Rule 173Q:
The show cause notice also proposed a penalty under Rule 173Q. The respondents contended that since the demand was time-barred, the penalty could not be imposed. The Commissioner upheld this view, noting that the Department was aware of all relevant facts and had previously dropped similar proceedings.

3. Confiscation of Land, Building, Plant, and Machinery:
The show cause notice proposed confiscation under Rule 173Q. The Commissioner did not find grounds for confiscation, given that the demand itself was time-barred and the Department had prior knowledge of the facts.

4. Imposition of Penalty on the Chairman under Rule 209A:
A separate show cause notice was issued to the Chairman, proposing a penalty under Rule 209A. The Commissioner found no grounds for imposing this penalty, as the primary demand was time-barred and there was no evidence of deliberate suppression of facts.

5. Time-Barred Nature of the Show Cause Notice:
The Commissioner found that the show cause notice was time-barred based on several factors:
- Classification lists and RT 12 returns were approved without objection.
- Previous show cause notices on similar issues were dropped.
- The Department was aware of the alleged misdeclaration as early as 28-1-1991.
- The issue of non-availability of exemption under Notification No. 25/91-C.E. was previously adjudicated in favor of the respondents.

6. Eligibility for Exemption under Notification No. 154/90-C.E.:
The respondents were eligible for exemption under Notification No. 154/90-C.E., which exempts cement manufactured in specified factories. The Standing Order (Tech) No. 61/91 clarified that the benefit of the exemption was available irrespective of the quantity of cement produced. The Commissioner found that the respondents met the criteria for the exemption and that the Department's own interpretations supported this eligibility.

7. Alleged Suppression of Facts:
The Revenue argued that the respondents had suppressed facts regarding their installed capacity. However, the Commissioner found that all relevant information had been provided in the classification lists and RT 12 returns. The Department had prior knowledge of the facts, and there was no evidence of deliberate suppression.

Conclusion:
The appeal by the Revenue was dismissed. The Commissioner found that the demand was time-barred, the respondents were eligible for the exemption under Notification No. 154/90-C.E., and there was no deliberate suppression of facts. Consequently, no penalties or confiscation were warranted.