2008 (3) TMI 555 - AT - Central Excise

Tribunal Upholds Decision on Limitation Period

The Tribunal upheld the decision to set aside the demand for the extended period of limitation as the appellant had not suppressed facts with mala fide ... Demand - Limitation - Penalty - Delayed payment of duty Issues:1. Applicability of extended period of limitation for demand of duty.2. Liability to pay interest under Section 11AB of the Central Excise Act.3. Imposition of penalty under Rule 25 of the Central Excise Rules, 2002.Analysis:Issue 1: Applicability of extended period of limitation for demand of dutyThe case involved the appellant contesting the order where the demand of duty for the extended period was set aside by the Commissioner (Appeals). The Revenue argued that the extended period of limitation should apply as the appellant had not filed quarterly ER-1 returns on time and had not included the duty paid under protest in the returns, indicating an intent to evade payment. However, the Tribunal found that the appellant had not suppressed any facts with mala fide intent. The Tribunal upheld the decision to set aside the demand for the extended period, as the appellant had filed the necessary declarations and returns, making it unlikely that there was an intent to evade payment.Issue 2: Liability to pay interest under Section 11ABThe Tribunal noted that the entire duty amount for the disputed period was paid under protest on 17-6-2004, and a show-cause notice was issued on 29-12-2004. The Tribunal determined that the duty payment fell under sub-section (2B) of Section 11A, making it unnecessary for the department to issue a show-cause notice for the normal period. The question of interest under Section 11AB arose after the show-cause notice, but the order was silent on this issue. The Tribunal directed the lower appellate authority to address the interest issue in light of the duty payment made under protest.Issue 3: Imposition of penalty under Rule 25The Tribunal found that the penalty under Rule 25 was relevant due to the delayed payment of duty, which contravened the Central Excise Rules. The Commissioner (Appeals) had not examined this aspect properly as the focus was on considerations related to Section 11AC, which was not invoked by the original authority. The Tribunal concluded that the penalty under Rule 25 should be considered, and the case was remanded to the lower appellate authority to decide on the interest and penalty issues after giving the appellant a chance to be heard.In conclusion, the Tribunal upheld the decision to set aside the demand for the extended period, directed a review of the interest issue, and emphasized the need to consider the penalty under Rule 25. The appeal was allowed by way of remand for further proceedings.