2018 (10) TMI 1542 - AT - Central Excise

Tribunal Upholds Commissioner's Decision on Time Limit for Duty Demand

Commissioner of Central Excise, Puducherry Versus Sun Pharmaceuticals India Ltd.

The Tribunal dismissed the appeal, upholding the Commissioner (Appeals)'s decision to set aside the demand on limitation grounds. The Tribunal emphasized ... 100% EOU - short payment of Additional Duty of Customs - the assessable value in respect of the goods cleared to their sister units was enhanced / re-determined - extended period of limitation - scope of SCN - Held that:- It is clear that in the earlier SCN dt. 22.10.2007 the department had not raised the allegation of extended period of limitation. It is only in the corrigendum issued to the said SCN that they have invoked proviso to Section 11AC of Central Excise Act 1994 for the period 1.3.2006 to 10.10.2006. The Commissioner (Appeals) has therefore rightly concluded that as the dispute was already in the domain of the department, the of allegation of suppression cannot be fastened on the respondents. The decision of the Commissioner (Appeals) in holding that the demand made in the SCN for the same period is hit by time-bar - Appeal is dismissed upholding the ground of limitation without going into merits. Issues:- Short payment of Additional Duty of Customs by 100% EOU for clearances to sister units in DTA- Dispute over the enhanced assessable value and differential duty demand- Appeal against Commissioner (Appeals) setting aside the demand on merits and limitation groundsAnalysis:Issue 1: Short payment of Additional Duty of CustomsThe case involved a 100% EOU engaged in manufacturing bulk drugs who had short paid the Additional Duty of Customs for clearances to their sister units in DTA. The respondents had paid duty based on their own ascertainment, but the assessable value was later enhanced, leading to a demand for the differential duty. The department issued a show cause notice proposing the demand, interest, and penalties, which was confirmed by the original authority. The Commissioner (Appeals) set aside the demand, leading to the department appealing before the Tribunal.Issue 2: Dispute over enhanced assessable value and differential duty demandThe department argued that the respondents were liable to pay the differential duty as the assessable value was enhanced/re-determined, despite the respondents already paying a certain amount based on their own ascertainment. The department contended that even though the goods were cleared to sister units, the Additional Duty of Customs was still applicable. The Tribunal upheld the department's argument, emphasizing that the respondents were liable to pay the differential duty for the enhanced value.Issue 3: Appeal against setting aside the demand on merits and limitation groundsThe Commissioner (Appeals) had set aside the demand on both merits and limitation grounds. However, the Tribunal focused on the time-bar aspect, noting that the show cause notice did not initially invoke the extended period of limitation. The Tribunal agreed with the Commissioner (Appeals) that since the dispute was already within the department's knowledge, the allegation of suppression could not be imposed on the respondents. Therefore, the Tribunal dismissed the appeal, upholding the ground of limitation without delving into the merits of the case.In conclusion, the Tribunal's judgment dismissed the appeal, emphasizing the importance of adhering to time limits in raising demands and highlighting the liability of the respondents to pay the differential duty based on the enhanced assessable value for clearances to sister units in DTA.