Limitation challenge in central excise demand must be decided first; failure to do so justified remand and fresh adjudication.

A jurisdictional limitation plea under the Central Excise Act must be adjudicated where it goes to the root of the demand, because application of the extended period depends on findings of wilful suppression or fraud. The appellate tribunal had not given adequate consideration to the assessee's limitation objection or the supporting factual material, so the findings on demand and penalty could not be sustained. The order reducing penalty and maintaining the connected demands was set aside, and the matters were remanded for fresh adjudication on limitation, merits, and penalty, with all contentions left open.

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Issues: (i) Whether the limitation issue under Section 11A of the Central Excise Act was considered and decided by the appellate tribunal; (ii) Whether the order reducing penalty and the connected demands could stand when the limitation issue had not been adjudicated.

Issue (i): Whether the limitation issue under Section 11A of the Central Excise Act was considered and decided by the appellate tribunal.

Analysis: The record showed that the limitation plea was raised and argued by the assessee, but the tribunal's order did not contain any adequate consideration of this jurisdictional question. The applicability of the proviso to Section 11A depended upon findings on wilful suppression and fraud, which required a clear adjudication on the factual material and correspondence relied upon by the assessee.

Conclusion: The limitation issue was not properly considered and required fresh determination.

Issue (ii): Whether the order reducing penalty and the connected demands could stand when the limitation issue had not been adjudicated.

Analysis: Since the jurisdictional question of limitation remained undecided, the findings on demand and penalty could not be sustained as final. The tribunal had also to reconsider the penalty question in the light of its findings on limitation and the merits of the adjudication order.

Conclusion: The impugned order was set aside and the matters were remanded for fresh adjudication.

Final Conclusion: The appeals succeeded to the extent of setting aside the tribunal's order and restoring the disputes for reconsideration on merits, with all contentions left open.

Ratio Decidendi: Where a jurisdictional limitation plea goes to the root of the demand, the appellate forum must adjudicate it before sustaining demand or penalty, and failure to do so warrants remand for fresh consideration.

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