Tribunal rules second notice invalid, demand incorrect, dismisses appeals for non-compliance

The Tribunal held that the second show cause notice was not maintainable as the first notice covered the same period and facts. The demand based on a percentage of the sale price was found to be incorrect, and the matter was remanded for verification. Appeals against the Commissioner's order were dismissed due to non-compliance with the Finance Act, rendering the order non-appealable. The Tribunal disposed of the appeals accordingly.

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Issues Involved:
1. Maintainability of subsequent show cause notice.
2. Sufficiency of subsequent reversal of credit with interest to discharge the demand.
3. Maintainability of appeals against the Commissioner's Order dated 28.12.2010.

Issue-wise Detailed Analysis:

1. Maintainability of Subsequent Show Cause Notice:
The appellant argued that the second show cause notice (SCN) dated 01.12.2005, covering the period from November 2000 to March 2005, was not maintainable as an earlier SCN dated 26.09.2005 for the period 2000-01 to March 2004 on the same grounds had already been issued but not adjudicated. The Tribunal referred to the Supreme Court's ruling in Nizam Sugar Factory vs. Collector of Central Excise, which held that once a SCN has been issued for a certain period on a set of facts, another SCN for the same period on the same facts invoking the extended period of limitation cannot be issued. The Tribunal concluded that since all relevant facts were known to the Department when the first SCN was issued, the second SCN was not maintainable.

2. Sufficiency of Subsequent Reversal of Credit with Interest:
The appellant contended that they had reversed the input credit of Rs. 7,85,573/- attributable to inputs used in the manufacture of exempted goods and had deposited Rs. 23,19,954/- against their liability. The Tribunal noted the Karnataka High Court's decision in Commissioner of Central Excise vs. Himalaya Drug Company, which stated that if CENVAT Credit attributable to inputs used in the manufacture of exempted final products is reversed along with interest, the manufacturer is not liable to pay 8% or 10% of the sale price of exempted goods. The Tribunal found that the method adopted by the adjudicating authority to demand Rs. 88,41,543/- based on 8% or 10% of the sale price was not maintainable. The matter was remanded to the adjudicating authority for verification of the appellant's claim of reversal of CENVAT Credit.

3. Maintainability of Appeals Against the Commissioner's Order Dated 28.12.2010:
The Tribunal examined the maintainability of Appeal No. E/444/2011 filed by the Revenue and Appeal No. E/449/2011 filed by the assessee against the Commissioner's Order dated 28.12.2010. The Tribunal noted that the Finance Act 2010 provided a one-time opportunity for manufacturers to pay an amount equivalent to CENVAT Credit attributable to inputs used in exempted final products. The appellant had not complied with the provisions of sub-section (3) of Sections 70 to 73 of the Finance Act 2010, as they failed to pay the differential amount within ten days of the Commissioner's order. Consequently, the Tribunal held that the Commissioner's order did not exist after the specified time and was not appealable under the Central Excise Act, 1944. Therefore, the Tribunal had no jurisdiction to entertain any appeal against the said order.

Conclusion:
The Tribunal disposed of the appeals in accordance with the findings on each issue. The second SCN was deemed not maintainable, the demand based on 8% or 10% of the sale price was remanded for verification, and the appeals against the Commissioner's order were dismissed for lack of jurisdiction.

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