1999 (8) TMI 663 - AT - Central Excise

Summary

Issues:
1. Demand of duty on levy sugar received as subsidy.
2. Invocation of provisions of Rule 9(2) and Sec. 11A(1) for demanding duty.
3. Application of limitation specified under Sec. 11A(1).
4. Interpretation of the term "intent to evade payment of duty" as per legal precedents.
5. Analysis of the proviso to Sec. 11A(1) and its application.
6. Examination of the Commissioner's authority to redefine terms under Sec. 11A(1).

Analysis:

1. The case involved sugar manufacturers who had received subsidy from the Ministry of Food following the Supreme Court's direction to refix the price of levy sugar retrospectively. The Central Excise Commissioner issued show-cause notices to recover duty on the subsidy received, terming it as additional consideration. The demands were confirmed, but penalties and interest were not imposed.

2. The Tribunal examined the invocation of Rule 9(2) for demanding differential duty. It was noted that the sugar was not surreptitiously removed, and duty was paid openly. Citing legal precedents, the demand under Rule 9(2) was deemed unsustainable.

3. The application of Sec. 11A(1) was scrutinized concerning the limitation period calculated from the date of the show-cause notice. Legal judgments were referenced to establish that the existence of suppression, fraud, or intent to evade duty must be proven by the Revenue, with specific definitions provided by the Supreme Court.

4. The term "intent to evade payment of duty" was elaborated upon, emphasizing that mere failure to pay duty is insufficient. The deliberate avoidance of duty payment with awareness of its leviability constitutes evasion, as defined by legal precedents.

5. The proviso to Sec. 11A(1) was invoked, but the conscious act of planning to evade duty was not explicitly outlined in the notices. The Commissioner's attempt to justify the demand based on the extended period was deemed illegitimate as the terms defined in the section could not be redefined.

6. The Tribunal concluded that there was no valid basis for sustaining the demands as per the show-cause notices. The appeals were allowed with consequential relief, highlighting the Commissioner's lack of authority to redefine terms under Sec. 11A(1) beyond the defined scope.

This comprehensive analysis of the judgment addresses the key issues raised in the case concerning duty demands on levy sugar subsidy and the application of relevant legal provisions and precedents.