2007 (2) TMI 146 - AT - Central Excise

Tribunal Upholds Limitation Issue Ruling, Emphasizes Wilful Misstatement Requirement

The Tribunal upheld the lower authorities' findings on the limitation issue and dismissed the appeal based on both merit and jurisdictional grounds. It ... Allegations of suppression of facts in SCN are vague and casual so larger period is not invokable – Hence demand is unsustainable – Instant appeal involves amount less than Rs. 50,000 is rejectable as not accordance with law Issues:Appeal against impugned orders passed by Additional Commissioner and Commissioner (Appeals) regarding alleged clandestine removal of wooden furnishings without paying Central Excise duty; Point of limitation under Section 11A(1) of the Central Excise Act; Allegations of suppression of facts; Discretion under Sec.35B(2) of the Central Excise Act for appeals involving less than Rs. 50,000.Analysis:The department appealed against the impugned orders alleging that the assessee clandestinely removed wooden furnishings without paying Central Excise duty. The crux of the issue revolved around the point of limitation under Section 11A(1) of the Central Excise Act. The department contended that both the Additional Commissioner and the Commissioner (Appeals) did not adequately address the issue of limitation and merely dropped the demand citing the expiry of the six-month period for issuing the show cause notice. The department argued that the authorities failed to establish the essential ingredients required to invoke the extended time limit under the proviso of Section 11A(1), such as suppression of facts with intent to evade payment of duty. The authorities' failure to explicitly allege deliberate suppression or wilful misstatement in the show cause notice was highlighted as a key point of contention.Upon examining the impugned orders, it was noted that the Additional Commissioner and the Commissioner (Appeals) both analyzed the issue of limitation in detail. The Additional Commissioner's order emphasized the necessity of proving deliberate suppression or wilful misstatement to invoke the extended time limit under Section 11A(1). The Commissioner (Appeals) similarly concluded that there was no established basis to allege wilful suppression of information with intent to evade duty. The lack of clear and specific instances of suppression of facts in the show cause notice was highlighted as a crucial factor in determining the validity of the department's claims regarding the limitation period.Furthermore, the Tribunal dismissed the appeal on both merit and pecuniary jurisdiction grounds. The Tribunal emphasized the equal application of discretion under Sec.35B(2) of the Central Excise Act to both assessee and department appeals involving amounts less than Rs. 50,000. It was observed that the Tribunal should exercise discretion at the initial stage of filing the appeal, rather than directly listing cases for regular hearing without scrutiny. The decision to dismiss the appeal was based on the reasoned findings of the lower authorities, which aligned with established legal principles and previous court judgments.In conclusion, the Tribunal upheld the findings of the lower authorities regarding the limitation issue and exercised discretion under Sec.35B(2) to dismiss the appeal on both merit and jurisdictional grounds. The judgment emphasized the importance of meeting the legal requirements for invoking extended time limits and maintaining consistency in the treatment of appeals based on their pecuniary value.