2014 (9) TMI 26 - AT - Central Excise

100% EOU - Bar of limitation - Self removal procedure - Held that - From the records it is clearly seen that the respondent had declared to the department that they would be availing the benefit of Notification 23/2003 in respect of advance DTA sales to be effected by them in terms of the permission granted by the Development Commissioner as early as in 2004 itself. Therefore, the respondent cannot be said to have withheld any information from the department. The respondent s plea that they were entitled for the benefit of exemption under Notification 23/2003 under the belief that they were entitled for benefit of such Notification cannot be said to be a mis-declaration as held by the hon ble apex Court in Northern Plastics Ltd. vs. Collector of Customs & Central Excise 1998 (7) TMI 91 - SUPREME COURT OF INDIA . If the department felt that the respondent was not entitled to such exemption, they should have issued the show cause notice within the period stipulated under Section 11A. Revenue s reliance on the decision of the Tribunal in the case of Endress Hauser Flowtech (I) Pvt. Ltd. (2008 (11) TMI 159 - CESTAT, MUMBAI) does not come to their rescue for the reason that B-17 bonds are executed not only by the 100% EoUs but also units in the DTA. If Section 11A is applicable in respect of units in DTA who have executed B-17 bonds before the department, the same logic would apply in respect of 100% EoUs as well. Therefore, the argument that merely because the respondent has executed a B-17 bond they would fall outside the purview of Section 11A is illogical and irrational. One cannot interpret the law in such a way so as to make the provisions of law redundant. Decided against Revenue.

Summary

Issues: Appeal against Order-in-Original setting aside duty demand as time-barred.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Original dated 19/04/2010 passed by the Commissioner of Central Excise, Pune - I Commissionerate, which set aside the demand of duty on a pharmaceutical company as time-barred. The Revenue contended that duty demands can be enforced without any time-limit under the self-removal procedure if the assessee fails to discharge their responsibility of determining and discharging correct duty liability.

2. The respondent, a pharmaceutical company, had intimated the department about obtaining permission for advance DTA sale and effecting clearances on payment of appropriate Central Excise duty. They had also indicated in their ER-2 returns that they were effecting advance DTA clearances under Notification 23/2003. Despite these declarations, a show cause notice demanding duty for the period April 2004 to March 2006 was issued on 03/07/2009. The respondent argued that the demands were time-barred as the department was aware of the concessional rate of duty being applied by them.

3. The Tribunal analyzed the submissions and found that the respondent had informed the department about availing the benefit of Notification 23/2003 for advance DTA sales as early as 2004. The Tribunal held that the respondent did not withhold any information and believed they were entitled to the exemption under the notification. Citing the decision in Northern Plastics Ltd. vs. Collector of Customs & Central Excise, the Tribunal emphasized that if the department disputed the exemption, a show cause notice should have been issued within the stipulated period under Section 11A. The Tribunal rejected the Revenue's argument that the execution of a B-17 bond would exempt the respondent from Section 11A, stating that such an interpretation would render the law redundant and illogical.

4. Consequently, the Tribunal found no merit in the Revenue's appeal and dismissed it as devoid of merits. The judgment highlighted the importance of timely issuance of show cause notices and the need to interpret laws in a manner that upholds their provisions rather than rendering them ineffective.