2000 (11) TMI 961 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty imposition against small-scale manufacturers for clearing final product at nil rate of duty after crossing the exemption limit.
2. Dispute regarding the limitation period for raising the demand.

Analysis:

Issue 1: Duty demand and penalty imposition
The appellants, small-scale manufacturers, were availing the benefit of Notification No. 1/93, allowing duty-free clearances up to Rs. 30.00 lakh and concessional duty rates thereafter. However, they continued to clear their final product at nil duty even after surpassing the exemption limit, leading to a demand of Rs. 93,508.58 in duty and a penalty of Rs. 1.00 lakh. The authorities confirmed the duty demand post a show cause notice, which the appellants did not contest on merits but argued that the demand was time-barred. The Revenue contended that the appellants were obligated to pay duty once the total clearances exceeded Rs. 30.00 lakh, alleging suppression on the appellants' part for not paying the duty timely.

Issue 2: Dispute over the limitation period
The appellants argued that the demand was barred by limitation as they had inadvertently cleared goods at nil duty despite reflecting the clearance figures in statutory records like RT-12 returns and gate passes. They relied on a Tribunal decision in a similar case to support their contention that failure to provide progressive totals of exempted clearances did not constitute suppression of facts warranting an extended limitation period. The Tribunal's prior ruling emphasized that mere short payment without mala fide intent or evasion did not justify invoking the longer limitation period under Section 11A of the Act. Citing this precedent, the Tribunal held that the demand in the current case was indeed time-barred, aligning with the previous decision's interpretation that the omission of progressive clearance totals did not amount to suppression.

In conclusion, the Appellate Tribunal allowed the appeal in favor of the appellants, ruling that the demand for duty was barred by limitation due to the absence of suppression of facts, as per the precedent set by a previous Tribunal decision. The appellants were granted consequential reliefs based on the limitation issue, highlighting the significance of timely duty payments and the interpretation of limitation periods in excise duty matters.