2019 (11) TMI 1013 - HC - Central Excise

Scope of SCN - time limitation - No order as to the appellant s challenge to the tax liability on the point of limitation was passed by the Tribunal - Whether the Tribunal having held that the argument with regard to limitation was raised, was justified in rejecting the application on the ground that the point raised was impliedly rejected? HELD THAT - When a quasi judicial authority considers legality and validity of an order on certain grounds including the ground of limitation, the said ground can never be impliedly rejected. Plea of limitation being an important defence available to the assessee as assessment after certain period is required to be made on certain foundations as provided in Section 11AC of Central Excise Act, 1944 read with Section 73(1) of Finance Act, 1994, the said plea cannot be impliedly rejected as the authorities are required to be satisfied about existence of the pre-requisites as contained in the said provision. Even otherwise, if the matter has been remitted back to the AO for decision afresh, there is no harm in allowing the appellant to raise the plea of limitation before the AO which can be simultaneously decided by the AO. The impugned order dated 24-11-2017 passed by the Tribunal is set aside with a direction that while hearing the matter upon remand by the Tribunal by its order dated 14-6-2017, the AO shall also decide the issue of limitation raised by the appellant.

Summary

Issues involved:
- Interpretation of the Central Excise Act, 1944 regarding the rejection of a plea on the ground of limitation
- Whether the Tribunal was justified in rejecting an application on implied grounds

Analysis:

The judgment by the Chhattisgarh High Court involved a significant issue regarding the rejection of a plea on the ground of limitation under the Central Excise Act, 1944. The appellant had challenged an order-in-appeal passed by the Commissioner of Central Excise (Appeals) and subsequently appealed to the Tribunal. The Tribunal remitted the matter back to the Assessing Officer (AO) for further consideration, providing the appellant an opportunity to defend on taxability, except for the relief granted by the Commissioner (Appeals). However, the Tribunal did not pass any order on the appellant's challenge to the tax liability concerning the point of limitation.

The appellant then filed an application for modification, asserting that the issue of limitation had been raised but not addressed by the Tribunal. The Tribunal, through the impugned order, stated that it had impliedly rejected the plea on limitation. The High Court emphasized that when a quasi-judicial authority examines the legality and validity of an order, including the ground of limitation, such a ground cannot be impliedly rejected. The plea of limitation is crucial as it provides a defense to the assessee, and the authorities must be satisfied about the prerequisites outlined in the relevant provisions.

The Court further highlighted the importance of the plea of limitation, as assessments after a certain period must be based on specific foundations as prescribed in the Central Excise Act, 1944, and the Finance Act, 1994. The judgment clarified that even if the matter is remitted back to the AO for a fresh decision, there is no harm in allowing the appellant to raise the plea of limitation before the AO, who can then make a simultaneous decision on the matter. Consequently, the High Court set aside the impugned order passed by the Tribunal and directed the AO to decide the issue of limitation raised by the appellant while hearing the remanded matter. The substantial question of law was answered accordingly, ensuring that the appellant's right to raise the plea on the ground of limitation is duly considered and addressed in the proceedings.