2015 (10) TMI 1799 - AT - Central Excise

Exciability of product - whether the product namely various namkeens were liable to duty during the period 2-6-1998 to 17-7-1998 (46 days) - Held that - As far as the leviability of duty on the impugned goods during the period 2-6-1998 to 17-7-1998 (both the days inclusive) is concerned, there is no ambiguity in this regard. Duty was imposed vide Notification No. 5/98-C.E., dated 2-6-1998 and it was withdrawn only on 18-7-1998. Therefore, during the intervening period, duty was obviously leviable. However I take note of the fact that this levy was introduced for the first time and it indeed caused protests of a magnitude that the Minister of Finance himself gave a public statement which was published in Rajasthan Patrika. Clearly, it gave an impression that the impugned levy was being postponed and it indeed was rescinded soon. The appellants provided figures promptly when asked by the department and the department issued the show cause notice more than one year and four months after the supply of those figures. All these factors lend support to the appellants contention that they had no intention to evade and did not pay duty as it was widely believed that the levy was going to be withdrawn. - impugned demand is hit by time-bar. - Decided in favour of assessee.

Summary

Issues:
1. Whether the product "various namkeens" were liable to duty during a specific period.
2. Whether there was suppression/wilful misstatement of facts by the appellant.
3. Whether the demand is time-barred.

Analysis:
1. The case revolved around the leviability of duty on "various namkeens" during the period from 2-6-1998 to 17-7-1998. Duty was imposed by Notification No. 5/98-C.E. on 2-6-1998 and rescinded by Notification No. 17/98-C.E. on 18-7-1998. The appellant argued that there was no intention to evade duty as there was uncertainty due to protests and public statements by the Minister of Finance hinting at the levy's withdrawal. The department sought clearance figures on 14-8-1998, which the appellant provided promptly on 4-9-1998. The show cause notice was issued on 20-12-1999, more than a year later. The tribunal acknowledged the circumstances and concluded that duty was leviable during the period in question but noted the lack of intent to evade duty due to the unique situation surrounding the levy.

2. The appellant contended that there was no suppression or wilful misstatement of facts on their part. The department argued that the appellant was not registered and did not pay duty, indicating wilful misstatement/suppression. However, the tribunal considered the prompt provision of clearance figures upon request and the delayed show cause notice issuance, concluding that there was no intention to evade duty, especially given the uncertainty surrounding the levy's withdrawal.

3. The tribunal found that the demand was time-barred due to the circumstances of the case, including the delayed show cause notice, the unique situation surrounding the levy, and the lack of intent to evade duty. As a result, the appeal was allowed, and the impugned demand was deemed time-barred, leading to a favorable decision for the appellant.