2018 (9) TMI 494 - HC - Central Excise

High Court modifies Tribunal's order, remits matter for fresh examination on limitation issue

The High Court allowed the appeal at the admission stage without seeking a counter affidavit and modified the Tribunal's order. The matter was remitted to ... Recovery of Central Excise Duty - Time Limitation - Section 11AC(1) of the Act - Held that:- When the matter was allowed and all the issues were directed to be decided by the Adjudicating Authority de novo, it would have been appropriate for the Tribunal to also remit the matter to the Adjudicating Authority to decide the question of limitation and the extended period of limitation under Section 11A(1) read with Section 11A(4) of the Act. The authority is required to consider whether any fraud or collusion or wilful misstatement or suppression or contravention of any provision of the Act was made by the appellant in a particular case while considering the extended period of limitation. Since the Tribunal has remitted the matter to the Adjudicating Authority for re-consideration on all the issues de novo, the question as to whether the show cause notice was issued within the period of limitation or otherwise needs to be considered and adjudicated afresh by the Adjudicating Authority. Appeal allowed by way of remand. Issues: Show cause notice validity; Central Excise Duty recovery; Limitation period for demand notice; Tribunal's decision on limitation period; Remittance of matter to Adjudicating Authority for fresh consideration.Show Cause Notice Validity: The appellant received a show cause notice demanding Central Excise Duty under Section 11A(4) of the Central Excise Act, 1944, along with interest and penalty. The appellant objected, citing limitation as a defense, but the objection was rejected by the Adjudicating Authority and the First Appellate Authority. The Tribunal, in its order, rejected the objection regarding limitation but remitted the matter to the Adjudicating Authority for fresh consideration with the possibility of taking additional evidence.Limitation Period for Demand Notice: The Tribunal, in its decision, upheld the finding of the Commissioner regarding the extended period of limitation. However, the High Court noted that the Tribunal's decision on the limitation period lacked detailed reasoning and failed to consider the specific circumstances of the case. The High Court emphasized that the Tribunal should have independently assessed the period of limitation in each case and provided clear reasons for its decision.Tribunal's Decision on Limitation Period: The High Court observed that the Tribunal's decision, which rejected the appellant's contention on limitation by merely concurring with the Commissioner's finding, was inadequate. The High Court highlighted that the Tribunal, as the final fact-finding authority, should have provided its own reasoned analysis on the period of limitation, especially considering the appellant's explanations regarding the interpretation of law and the declaration of goods.Remittance of Matter to Adjudicating Authority: The High Court allowed the appeal at the admission stage without calling for a counter affidavit. As the matter was already remitted to the Adjudicating Authority for reconsideration on all issues, the High Court modified the Tribunal's order. The Adjudicating Authority was directed to decide not only all issues but also specifically address the applicability of the period of limitation and the extended period of limitation in issuing the demand notice by the respondents. The High Court emphasized the need for a fresh consideration of the limitation issue in light of the appellant's contentions.