2019 (3) TMI 1496 - AT - Central Excise

Classification of goods - Precipitated Chalk - whether classifiable and chargeable to duty @ 16% under chapter 28 (Inorganic Chemicals) or under Chapter 25 (Mineral Products) attracting nil rate of duty? - Time limitation - Held that - In the present case, the period involved is March 1994 to August 1996, November 1997 to January 2011 and December 2002 to February 2004. It is observed that the issue involved in the present case has been disputed right from the year 1987 and for the period 01.06.1987 to 30.09.1987 and 01.10.1987 to 08.12.1987 - For the subsequent period from 13.06.1994 onwards Commissioner (appeals) vide order in Appeal No. Commr.(A)/234/VDR/98 dated 25.02.1998 dropped the demand. In this fact, the appellant has a bonofide belief that in view of Commissioner (appeals) order, their case stand decided in their favour, therefore, for subsequent period demand notice issued invoking extended period is clearly hit by time limit as prescribed under proviso to Section 11A of Central Excise Act, 1944. The Revenue despite the recurring nature of the issue delayed, the issuance of SCN involved in the present appeals. There is no suppression of fact, mis-declaration, collusion, fraud on the part of the appellant in the facts and circumstance of the present case, therefore, the demand for the extended period in every SCN involved in the present case is not sustainable. However, if any demand pertains to the normal period, the same is liable to be confirmed and recovered from the appellant. Since there is no suppression of fact, the appellant is also not liable for any penalty, accordingly, the penalty is set aside. The impugned orders are modified to the above extent and appeals are disposed of by way of remand to the adjudicating authority only for re-quantification of demand of duty in respect of normal period of limitation.

Summary

Issues Involved:
Classification of excisable goods under Chapter 28 or Chapter 25, Extended period for demand, Suppression of facts, Misstatement, Intent to evade payment of duty, Delay in issuance of Show Cause Notice (SCN), Applicability of limitation period, Penalties.

Classification of Excisable Goods:
The main issue was whether the appellant's manufactured excisable goods, Precipitated Chalk, should be classified and charged duty under Chapter 28 (Inorganic Chemicals) at 16% or under Chapter 25 (Mineral Products) attracting a nil rate of duty. The appellant conceded that the issue of classification was resolved against them by the Supreme Court in a previous case, and favorable orders from the past were also discussed.

Extended Period for Demand:
The appellant argued that there was no suppression of facts on their part, and hence, the demand for the extended period could not have been raised. They highlighted delays in issuing Show Cause Notices (SCNs) and cited legal precedents to support their stance. The Tribunal observed that the demand for the extended period was not sustainable due to the lack of suppression of facts by the appellant.

Suppression of Facts and Misstatement:
The Revenue contended that the appellant's failure to provide vital information in time amounted to suppression of facts with the intent to evade payment of duty, justifying the invocation of the extended period. However, the Tribunal disagreed, stating that delays in furnishing information did not necessarily indicate suppression of facts, especially when the Revenue had other means to obtain the required details.

Delay in Issuance of SCN and Applicability of Limitation Period:
The appellant highlighted delays in issuing SCNs despite timely provision of information, arguing that the demand for the extended period was not sustainable. Legal judgments were cited to support this argument, emphasizing that delays in issuing SCNs did not necessarily indicate suppression of facts.

Penalties:
The Tribunal concluded that since there was no suppression of facts by the appellant, they were not liable for any penalties. The impugned orders were modified to confirm demands for the normal period and set aside penalties. The appeals were remanded for re-quantification of demand for the normal period of limitation.

This detailed analysis of the judgment covers the various issues involved and the arguments presented by both parties, leading to the Tribunal's decision on each aspect of the case.