2014 (1) TMI 1647 - HC - Central Excise

Appeal allowed, time-barred claim dismissed.

The Civil Miscellaneous Appeal was allowed, setting aside the CESTAT's Final Order and reinstating the Commissioner of Central Excise (Appeals)'s ... Duty demand - Suppression of facts - Invocation of extended period of limitation - Whether the claim of the Department is barred by limitation, since the period started from 28-1-1997 to 31-3-1997 - Held that:- If there is no suppression of facts on the part of the assessee, the normal period of limitation for making claim of Central Excise duty is six months and if there is suppression of facts, the period of six months would extend to five years. - appellant/assessee has duly intimated the process of job work received from M/s. Raghavendra Spinners Limited, Tirunelveli. The only contention putforth on the side of the Department is that even though the assesses has fairly conceded that it has received job work from M/s. Raghavendra Spinners Limited, Tirunelveli it failed to intimate either brand name or trade name. In order to answer befittingly, the learned counsel appearing for the appellant/assessee has drawn the attention of the Court to the decision referred to earlier, wherein it has been clearly mentioned that failure to mention classification as supplied by assessee does not come within the purview of suppression of facts. Therefore, it is quite clear that there is no suppression of facts on the part of the appellant/assessee in respect of job work done by it during the relevant period mentioned in the show cause notice. The claim in question has been made for the period started from 28-1-1997 to 30-3-1997 and show cause notice has been given on 3-8-1998. Even from 31-3-1997, no show cause notice has been given within a period of six months. Under the said circumstances, the demand made through show cause notice, dated 3-8-1998 is clearly barred by limitation. Since the claim made through show cause notice, dated 3-8-1998 is barred by limitation, it is needless to say that the order passed by the CESTAT is liable to be set aside and the order passed by the Commissioner of Central Excise (Appeals), Tiruchirapalli is liable to be restored. - Decided in favour of assessee. Issues:Claim of Department barred by limitation - Whether suppression of facts present - Correct period of limitation - Validity of CESTAT's decision.Analysis:The case involves a Civil Miscellaneous Appeal against the Final Order passed by the CESTAT in Appeal No. E/712/2002. The appellant, engaged in cotton yarn manufacturing and job work, received a show cause notice alleging central excise duty evasion due to suppression of material facts. The Joint Commissioner upheld the demand, later set aside by the Commissioner of Central Excise (Appeals), leading to the Department filing Appeal No. E/172/2002 before the CESTAT.The CESTAT allowed the Department's appeal, prompting the present Civil Miscellaneous Appeal by the assessee. The central issue revolves around the limitation period, starting from 28-1-1997 to 31-3-1997, and whether the Department's claim is time-barred. The appellant argues that the show cause notice issued on 3-8-1998 exceeds the six-month limitation period from the due date of Central Excise Duty, thus rendering the demand barred by limitation. Conversely, the respondent contends that suppression of brand/trade names extends the limitation to five years.The Court analyzed whether the appellant willfully suppressed goods details during job work, emphasizing that if no suppression exists, the standard limitation is six months. The appellant duly reported job work details to the Department, and failure to disclose brand/trade names does not constitute suppression as per legal precedents. The CESTAT's rejection based on alleged suppression was deemed erroneous by the Court.Referring to Section 11(A) of the Central Excise Act, the Court reiterated that a five-year limitation applies only in cases of willful suppression. Since no suppression was found, the six-month limitation period was deemed applicable. As the show cause notice was issued beyond the six-month limit from the relevant period, the demand was held time-barred. Consequently, the CESTAT's decision was set aside, restoring the Commissioner of Central Excise (Appeals)'s order.In conclusion, the Civil Miscellaneous Appeal was allowed, setting aside the CESTAT's Final Order and reinstating the Commissioner of Central Excise (Appeals)'s decision.