2002 (9) TMI 860 - AT - Central Excise

Appellate Tribunal rules in favor of appellants, setting aside duty demand and penalty. Time bar aspect upheld.

The Appellate Tribunal CEGAT, Mumbai ruled in favor of the appellants, setting aside the duty demand and penalty imposed by the Commissioner of Central ... Limitation - extended period of limitation - recovery of duty based on statutory documents - suppression of facts with intention to evade dutyExtended period of limitation - recovery of duty based on statutory documents - Whether the demand for duty and penalty, raised under the extended period on account of alleged suppression, was barred by limitation where it was based on statutory documents filed by the assessee. - HELD THAT: - The Tribunal found that the notice of demand issued in 1995 alleged suppression with intent to evade duty and invoked the extended period. However, the duty demand rested on statutory documents (AR 3-A re-warehousing certificates) filed by the appellants during the relevant period which showed short re-warehousing. Where the departmental case is founded on such statutory documents already on record, the extended period of limitation cannot be invoked and the normal period must apply. The Tribunal relied on the earlier decision in M/s. ITI Ltd. vs. CCE, Allahabad as directly applicable and concluded that the department ought to have issued the notice within the normal period of limitation. Since the show cause was issued beyond that normal period, the demand was time-barred. The Tribunal therefore allowed the appeal on the limitation ground and did not examine the merits (including the admissibility of Notification No. 75/84-CE). [Paras 4]Demand and penalty set aside as barred by limitation; appeal allowed on time-bar without adjudicating merits.Final Conclusion: The appeal is allowed on the ground that the show cause notice and consequent demand-being based on statutory documents filed by the assessee-were barred by limitation; the matter is disposed of on that ground without deciding the merits. The Appellate Tribunal CEGAT, Mumbai ruled in favor of the appellants, setting aside the duty demand and penalty imposed by the Commissioner of Central Excise, Vadodara. The demand was found to be barred by limitation as the show cause notice issued in 1995 was based on statutory documents and should have been issued within the normal period of limitation. The appeal was allowed on the time bar aspect without delving into the merits of the case.