Tribunal deems corrigendum invalid, time limits under Central Excise Act apply. Extended period inapplicable.

The tribunal found the corrigendum invalid as it altered the original demand basis. Time limits under Section 11A of the Central Excise Act apply to demands on DTA clearances. The extended period was deemed inapplicable due to lack of evidence of intentional evasion. The case was remanded for quantification of duty with proof of deemed export benefits. The appeals were partially allowed, and no penalties were imposed on the appellants.

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Issues Involved:
1. Validity of the corrigendum issued after the personal hearing.
2. Applicability of time limits for raising demands on DTA clearances when a general B-17 bond has been executed.
3. Invocation of the extended period of 5 years for the demand.
4. Whether the appellants contested the issue on merits before the Adjudicating authority.
5. Imposition of penalties on the appellants.

Issue-wise Detailed Analysis:

1. Validity of the Corrigendum:
The main show cause notice dated 14.12.2011 demanded duty of Rs. 1,33,22,958/- based on Serial No. 2 of Notification No. 23/2003-CE. The corrigendum dated 18.06.2012 revised the duty demand to Rs. 4,86,65,605/- by including additional duties at full tariff rates on DTA sales, which was not part of the original notice. The tribunal found that the corrigendum changed the basis of the original demand, thus it was not merely a correction of arithmetic error but introduced new grounds, making it invalid.

2. Applicability of Time Limits for Raising Demands:
The Revenue argued that no time limit applies for raising demands on DTA clearances when a general B-17 bond is executed. However, the tribunal referred to precedents indicating that Section 11A of the Central Excise Act, 1944, applies to such demands. The tribunal held that the duty demand for DTA clearances cannot be enforced through the B-17 bond as the bond primarily covers duty-free inputs and machinery, not DTA clearances.

3. Invocation of Extended Period:
The Adjudicating authority invoked the extended period on the grounds of non-disclosure by the appellants that their supplier, GHCL, availed deemed export benefits under Para 8.3(a) and (b) of the FTP. The tribunal found no evidence that the appellants were aware of GHCL availing such benefits. The documents from GHCL did not indicate deemed export benefits, and the appellants had been filing all required documents and returns. Therefore, the extended period of five years was not applicable.

4. Contesting the Issue on Merits:
The Revenue argued that the appellants did not contest the merits before the Adjudicating authority. However, the tribunal noted that the appellants did contest their entitlement to the exemption under Serial No. 3 of Notification No. 23/2003-CE and provided detailed arguments in their replies. Therefore, the tribunal found that the appellants did contest the issue on merits.

5. Imposition of Penalties:
Given that the extended period was not applicable and there was no evidence of intentional evasion of duty, the tribunal held that penalties were not imposable on the appellants.

Conclusion:
The tribunal concluded that the corrigendum dated 18.06.2012 was invalid as it changed the basis of the original demand. The demand for DTA clearances must adhere to the time limits under Section 11A of the Central Excise Act. The extended period was not applicable due to the lack of evidence of intentional evasion. The case was remanded back to the Adjudicating authority for quantification of duty after providing evidence of GHCL availing deemed export benefits under Para 8.3(a) and (b) of the FTP. The appeals were allowed to the extent indicated, and no penalties were imposed on the appellants.

(Pronounced in the open Court on 11.08.2015)

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