Relevant date for excise limitation includes return due date, while Section 209A penalty needs prior knowledge of confiscable goods.
For computing the normal period under Section 11A(3)(ii)(a), the relevant date was treated as the date duty became payable under the Act or rules, including the due date for filing the monthly return; on that basis, the November 1997 period fell within the show cause notice dated 5-6-1998, and the demand from 1-11-1997 onward was covered. Penalty under Section 209A was held unsustainable against a partner where there was no possession of the goods and no basis to infer prior knowledge that they were liable to confiscation; the penalty was therefore deleted.
Issues: (i) Whether, for a show cause notice issued under Section 11A(3)(ii)(a), the relevant date for computing the normal period includes the due date for filing the monthly return so as to cover the month of November 1997; (ii) Whether penalty under Section 209A could be sustained against the partner in the absence of prior knowledge or possession of the goods liable to confiscation.
Issue (i): Whether, for a show cause notice issued under Section 11A(3)(ii)(a), the relevant date for computing the normal period includes the due date for filing the monthly return so as to cover the month of November 1997.
Analysis: The provision was read to mean that the six-month period is counted backward from the date on which duty became payable under the Act or the rules made thereunder. On that basis, the due date for filing the monthly return was treated as the relevant date. Since the return for November 1997 was due on 15-12-1997, the month of November 1997 fell within the notice dated 5-6-1998.
Conclusion: The demand for the period from 1-11-1997 onwards was held to be covered by the show cause notice, and the Revenue succeeded on this issue.
Issue (ii): Whether penalty under Section 209A could be sustained against the partner in the absence of prior knowledge or possession of the goods liable to confiscation.
Analysis: Penalty under Section 209A was found unsustainable because the person proceeded against did not have possession of the goods and there was no basis to infer prior knowledge that the goods were liable to confiscation. The requirement of knowledge was treated as essential before fastening liability under the provision.
Conclusion: The deletion of penalty was upheld and the challenge by the Revenue failed on this issue.
Final Conclusion: The appeal succeeded only on the limitation and demand-period question, while the relief from penalty was maintained, resulting in partial success for the Revenue.
Ratio Decidendi: For computing the normal period under Section 11A(3)(ii)(a), the relevant date is the date when duty becomes payable, including the due date for filing the monthly return, and penalty under Section 209A requires prior knowledge of the confiscable nature of the goods.