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2018 (6) TMI 865 - AT - Central ExciseValuation - bearings sold to distributors and stockists - Department was of the view that during the period of dispute, the various types of bearings manufactured and cleared for use in the automobile industry are liable for payment of excise duty on MRP basis in terms of Section 4A - Held that - It is seen that the issue whether ball bearings will be covered by the above description was a matter of doubt in the field which came to be clarified by the Board circular dated 16.12.2008. The ball bearings manufactured by the appellant will fall within the notification and hence appellant is liable to payment of duty under Section 4A on the said goods. Extended period of limitation - Held that - When there were doubts in the field as well as even in the minds of the departmental officers whether such goods will be covered within the entry in the notification, the allegation of suppression made against the appellant cannot be sustained - invoking the extended time limit under Section 11A is to be set aside and demand restricted to that falling within the normal time limit. Appeal allowed - decided in favor of appellant.
Issues:
1. Applicability of MRP valuation under Section 4A of the Central Excise Act to bearings sold to distributors and stockists. 2. Interpretation of the term "parts, components and assemblies of automobiles" under Notification No. 11/2006-CE (NT). 3. Justifiability of invoking the extended period under Section 11A for demanding differential excise duty. 4. Retrospective application of beneficial circulars issued by the CBEC. 5. Assessment of suppression of facts by the appellant. Analysis: 1. The appeal challenged an Order-in-Original regarding the demand for differential excise duty on bearings sold to distributors and stockists. The dispute revolved around whether these bearings are liable for excise duty under MRP valuation as per Section 4A of the Central Excise Act. 2. The issue of whether ball bearings fall under the category of "parts, components and assemblies of automobiles" as per Notification No. 11/2006-CE (NT) was a key point of contention. The appellant argued that a CBEC Circular clarified the inclusion of items like ball bearings under this category, leading them to start discharging duty under Section 4A. 3. The appellant contested the justifiability of invoking the extended period under Section 11A for demanding the differential duty, citing the issuance of the CBEC Circular as a basis for their compliance with the duty payment requirements. 4. The circular issued by the CBEC was crucial in determining the retrospective application of the duty payment requirements. The appellant relied on precedents to argue that beneficial circulars should have retrospective effect, influencing their duty payment obligations. 5. The Tribunal found that the appellant's ball bearings indeed fell within the scope of the notification, making them liable for duty under Section 4A. However, considering the doubts in the field and among departmental officers regarding the applicability of the notification, the allegation of suppression against the appellant was deemed unsustainable. As no demand survived within the normal time limit, the extended period under Section 11A was set aside, and the appeal was allowed. This detailed analysis of the judgment highlights the critical legal issues addressed and the Tribunal's findings on each point, ensuring a comprehensive understanding of the case.
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