2017 (3) TMI 227 - AT - Central Excise

Time-barred duty demand notice overturned due to timely disclosure

The Tribunal held that the show cause notice for duty demand, concerning the change in production capacity, was time-barred as it was issued after six ... Change in the annual production capacity - demand - time limitation - Held that: - As regard the change of parameter for re-determination of production capacity was applied by the appellant to the Commissioner on 17-12-1997 wherein appellant have declared that on the revised capacity they will be paying duty w.e.f. 1-1-1998. The appellant have been filing monthly RT12 return wherein the payment of duty as per the revised capacity was declared. With this fact department was well aware that appellant for paying duty on the revised capacity w.e.f. 1-1-1998, therefore I do not see any suppression of facts on the part of the appellant - demand is time barred - appeal allowed - decided in favor of appellant. Issues Involved:1. Time-barred show cause notice for duty demand regarding change in production capacity.Analysis:Issue 1: Time-barred show cause notice for duty demand regarding change in production capacityThe case involved the appellant, engaged in manufacturing excisable goods, specifically hot rerolled products. The appellant followed the procedure under Rule 96 ZP of the erstwhile Central Excise Rules. The Commissioner initially determined the annual production capacity as 7692 MT, requiring a monthly duty payment of &8377; 1,92,300. Subsequently, the appellant informed the Commissioner of changing parameters and requested a re-determination of the production capacity. The Commissioner re-determined the capacity as 3344 MT, with a revised duty of &8377; 83,700 per month, effective from 1-1-1998. The appellant paid duty as per the revised capacity before the issuance of the revised order. The Revenue issued show cause notices for duty demands for various periods, which the Deputy Commissioner partially upheld. The appellant contended that the show cause notice was time-barred as the demand for the period 1/98 to 4/98 was issued after six months from the relevant period. The appellant had informed the Commissioner of the parameter change, and the department was aware of the revised duty payments since 1-1-1998. The Tribunal held that since there was no suppression of facts by the appellant, the demand made after six months was time-barred. The impugned order was set aside, and the appeal was allowed.In conclusion, the Tribunal found that the show cause notice for duty demand, concerning the change in production capacity, was time-barred as it was issued after six months from the relevant period. The appellant had duly informed the Commissioner of the parameter change, and there was no suppression of facts, leading to the decision in favor of the appellant.