2007 (9) TMI 513 - AT - Central Excise

Tribunal rules in favor of appellant, sets aside penalties, and remands matter for quantification

GAJENDRA ENTERPRISES Versus COMMISSIONER OF C. EX., DAMAN

GAJENDRA ENTERPRISES Versus COMMISSIONER OF C. EX., DAMAN - 2008 (232) E.L.T. 445 (Tri. - Ahmd.) Issues:1. Barred by limitation - Show cause notice timing2. Misdeclaration and suppression of facts3. Extended period invocation for wrongly claimed benefit of notification4. Misstatement or suppression of facts for invoking longer period5. Imposition of penalty and interest6. Confiscation of assets and penalty on the ManagerAnalysis:Issue 1: Barred by limitation - Show cause notice timingThe Appellate Tribunal noted that the duty amount was confirmed against the appellant for clearances of Thermo Plasto Elastomere (TPE) during a specific period. The appellant argued that the show cause notice issued was barred by limitation, except for a 6-month period prior to its issuance. The Tribunal agreed with the appellant, emphasizing that the demand in question was indeed barred by limitation. They set aside the impugned order and remanded the matter for the quantification of the demand within the limitation period.Issue 2: Misdeclaration and suppression of factsThe Additional Commissioner observed that the appellant had cleared goods without payment of duty under an exemption notification, which they were not entitled to. The Commissioner (Appeal) found that the appellant had misdeclared or suppressed facts regarding their products, leading to the invocation of the extended period for scrutiny. The penalty imposed on the appellant was deemed justified under Rule 173Q due to the misdeclaration and suppression of facts.Issue 3: Extended period invocation for wrongly claimed benefit of notificationThe Revenue invoked the extended period based on the appellant's wrongful claim of the notification benefit. The appellant argued that they had filed regular returns with detailed invoices, and every fact was known to the Revenue. The Tribunal agreed with the appellant, stating that a wrong claim of notification benefit does not amount to misstatement or suppression of facts warranting an extended period.Issue 4: Misstatement or suppression of facts for invoking longer periodThe Tribunal concurred with the appellant's submission that the scrutiny of the declaration, which formed the basis for the show cause notice, could have been done immediately after filing. As the appellant had disclosed all relevant facts in the declaration, the demand was considered barred by limitation. The Tribunal set aside the order and remanded the matter for quantification within the limitation period.Issue 5: Imposition of penalty and interestThe appellant was granted the liberty to contest the imposition of penalty and interest before the lower adjudicating authority. The confiscation of assets was set aside, and no justifiable reason was found for imposing a penalty on the Manager, leading to its removal.Issue 6: Confiscation of assets and penalty on the ManagerThe Tribunal disposed of both appeals by setting aside the confiscation of plant, machinery, land, and building. Additionally, the penalty imposed on the Manager was also removed, providing relief in this regard.