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2019 (3) TMI 765 - AT - Central ExciseExtended period of limitation - suppression with intention to evade payment of duty or not - Held that - The appellant having paid the duty liability and the interest there of on being pointed out by the auditors and clarified to the department by a letter dated 07.02.2006 that it was due to bonafide impression they did not pay the duty on the clearances of returned finished goods was unnecessary and a show-cause notice dated 18.06.2008 was issued by invoking extended period - the allegation of suppression can not stand the scrutiny of the law, as appellant has been stating from the beginning that the goods were cleared prior to October 1999 and received back during the period October 1999 to November 2004 and subsequently cleared in November 2004 without payment of duty. This stand of the appellant needs to be considered for deciding the issue and appellant has made out a case that they had no malafide intention in removal of the goods in November 2004 - appeal allowed by way of remand.
Issues involved:
Confirmation of demand invoking longer period of limitation on the ground of suppression to evade duty payment. Analysis: The appeal challenged the order-in-appeal dated 31.08.2009 regarding the confirmation of demand by lower authorities based on the longer period of limitation due to alleged suppression to evade duty payment. The appellant contended that duty paid fertilizers cleared in November 2004 had been returned after being rejected by field formations, and were cleared again without duty payment under the impression that they were not dutiable as duty had been paid during the initial clearance. The appellant discharged the duty liability with interest under protest in September 2005 following an audit. The appellant argued that the duty was paid before the show-cause notice was issued, and authorities were aware of the payment, thus challenging the demand based on limitation. The appellant relied on several judgments of the Apex Court to support their case. The learned A.R. supported the lower authorities' findings, stating that the appellant failed to prove that they had informed the department about the duty-free clearances in November 2004, which were only discovered during an audit, indicating suppression of facts. Upon careful consideration, the adjudicating authority noted that the appellant had cleared rejected pesticides in November 2004 after initially paying duty on them prior to October 1999. The appellant consistently maintained that they believed duty did not need to be paid again on returned goods previously cleared with duty. The appellant paid the duty liability upon audit findings and explained in a letter that the non-payment was due to a genuine belief, leading to a show-cause notice issued in 2008 invoking an extended period. The judgment concluded that the appellant's stance, supported by case law, demonstrated no malicious intent in the clearance of goods in November 2004, and the allegation of suppression was unfounded. Consequently, the impugned order was set aside, and the appeal was allowed. In conclusion, the judgment analyzed the issue of confirmation of demand based on the longer period of limitation due to alleged suppression to evade duty payment. The appellant's consistent stance, supported by legal precedents, demonstrated a lack of malafide intent in the clearance of goods without duty payment in November 2004. The judgment set aside the impugned order and allowed the appeal, emphasizing the importance of considering the appellant's genuine belief and actions in the context of duty payment obligations.
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