2023 (10) TMI 957 - AT - Central Excise

Time limitation - SSI Exemption - Submersible Pumps falling under CETH 8413 7010 - though the product of the appellant was claimed in confirmation to the standards of Bureau of Indian Standards (BIS) but the Certificate was obtained subsequently - HELD THAT - It is the appellant s claim that the goods manufactured by them is in conformation to standards of BIS. This claim of the appellant gets reinforced on the basis that for the same product subsequently, the appellant were issued certificate by the BIS certifying that the product manufactured by the appellant is as per the standards prescribed under BIS. On this basis the bonafide belief of the appellant is found factually correct. As per the claim of the appellant, the same product which was subsequently certified by BIS was in conformation to the standards of BIS, therefore, the appellant have rightly entertained the belief that their product is exempted under N/N. 8/2003. There is no malafide on the part of the appellant with intent to evade payment of duty. For the demand under extended period in the present case for the period 01.01.2007 to 18.03.2009, the show cause notice was issued on 04.04.2012 which is much after the normal period of one year. Since the appellant had no malafide intention the entire demand raised by invoking the extended period will not sustain on the ground of time bar itself - the demand is hit by limitation - Appeal allowed.

Summary

Issues involved:
The issue in the present case is whether the appellant is entitled to SSI Exemption for their final product, Submersible Pumps falling under CETH 8413 7010, based on the conformation to Bureau of Indian Standards (BIS) standards, even though the Certificate was obtained subsequently, and whether the demand is time-barred.

Judgment Details:

Issue 1: SSI Exemption and Conformation to BIS Standards

The appellant claimed SSI Exemption for their Submersible Pumps, stating that even though the Certificate from BIS was obtained subsequently, the product was manufactured in conformance with BIS standards. The appellant argued that the absence of the certificate should not deny the exemption as long as the product meets the BIS standards. They emphasized the bonafide belief in the product's conformity, supported by the later certificate issued by BIS for the same product. The appellant contended that no suppression of fact could be attributed to them. The Tribunal noted that the appellant's claim was reinforced by the subsequent BIS certificate, certifying the product's conformity to BIS standards. It was observed that the Notification did not mandate the certificate but required the product to meet BIS standards, which the appellant's product did. The Tribunal found no malafide intent on the appellant's part to evade duty. The demand for the period 01.01.2007 to 18.03.2009 was issued much after the normal period, and since the appellant had a bonafide belief, the demand under the extended period was held time-barred. Consequently, the demand was set aside, and the appeal was allowed.

Conclusion:
The Tribunal ruled in favor of the appellant, allowing the appeal based on the finding that the demand was time-barred due to the appellant's bonafide belief in the conformity of their product to BIS standards, supported by the subsequent certificate issued by BIS.