2015 (8) TMI 1128 - HC - Central Excise

Duty demand u/s 11A - Suppression of facts - Misdeclaration of goods - Whether the CESTAT, was right in rejecting extended period of demand under Section 11A of Central Excise Act, 1944 and in not restoring levy of mandatory penalty under Section 11AC, levy of interest under Section 11AB of the Act and penalties under Rules 173Q and 226 of Central Excise Rules, 1944, holding that no mis- declaration or suppression was made by the respondent - Held that - Even before the Tribunal, there was no material placed to controvert the finding of the Commissioner as recorded in the Order-in-Original. The Tribunal had also, considering the fact that when there was a scope for doubt whether the goods were dutiable or not, refused to apply extended period of limitation. - as both the primary authority as well as the appellate Tribunal has found, as a matter of fact, that there was a genuine doubt with respect to dutiability, both the authorities did not find it appropriate to apply extended period of limitation to the facts of the case. - No reason to interfere as it is purely a finding of fact recorded by the authorities on appreciation of the material on record - Decided against Revenue.

Summary

Issues:
1. Whether the Customs, Excise and Service Tax Appellate Tribunal was right in rejecting the extended period of demand under Section 11A of the Central Excise Act, 1944 and not restoring the levy of mandatory penalty under Section 11AC, levy of interest under Section 11AB, and penalties under Rules 173Q and 226 of the Central Excise Rules, 1944.

Analysis:
The appeal before the High Court of Andhra Pradesh was brought by the Revenue against an order that raised the issue of whether the Tribunal was correct in rejecting the extended period of demand under Section 11A of the Central Excise Act, 1944. The Court noted that the Tribunal had found no suppression of turnover or misdeclaration. The Commissioner's Order-in-Original had also concluded that there was no misdeclaration in the raw material account. The Court highlighted that the Tribunal, in line with Supreme Court judgments, refused to apply the extended period of limitation due to genuine doubts regarding dutiability. Both the primary authority and the appellate Tribunal had found a genuine doubt with respect to dutiability, leading them not to apply the extended period of limitation. The High Court, after reviewing the facts and findings, concluded that there was no reason to interfere as the authorities had made a factual determination based on the evidence on record. Therefore, the Court dismissed the appeal, upholding the decisions of the lower authorities.

In conclusion, the High Court upheld the Tribunal's decision to reject the extended period of demand and not restore the mandatory penalty, interest, and penalties under the Central Excise Act and Rules. The Court emphasized that the authorities had found genuine doubts regarding dutiability, leading to the refusal to apply the extended period of limitation. The Court's decision was based on the factual findings and evidence on record, resulting in the dismissal of the appeal.