Tribunal rules in favor of appellants, setting aside Central Excise Duty demand

The Tribunal allowed the appeal, setting aside the Order-in-Original and ruling in favor of the appellants. The Tribunal held that the demand for Central Excise Duty on manufacturing branded mineral water was invalid due to the Revenue invoking the extended period of limitation without sufficient evidence of suppression of facts by the appellants. The confusion between packaged drinking water and mineral water, coupled with the lack of deliberate intent to evade duty, led to the Tribunal granting consequential relief to the appellants.

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Issues involved:
- Appeal against Order-in-Original regarding Central Excise Duty demand for manufacturing branded mineral water
- Allegation of suppression of facts by the appellant
- Extended period of limitation invoked by the Revenue

Analysis:

Issue 1: Appeal against Order-in-Original regarding Central Excise Duty demand for manufacturing branded mineral water
The case involved an appeal against Order-in-Original No. 115/2011 passed by the Commissioner of Central Excise, Chennai-III Commissionerate. The appellants, who were manufacturers of Ready Mix Concrete, started packing packaged drinking water in April 2004. The Central Excise Commissionerate audited the unit in May 2009 and issued a Show Cause Notice in November 2010, alleging that the appellants had manufactured branded mineral water without declaring it to the Department, evading Central Excise Duty amounting to around Rs. 98 lakhs. The Original Authority confirmed the demand and imposed penalties, leading to the appeal before the Tribunal.

Issue 2: Allegation of suppression of facts by the appellant
The appellants contested the Show Cause Notice, arguing that they were packing drinking water and not manufacturing mineral water. They claimed that all transaction details were recorded and reported to government departments through required returns, indicating no suppression of facts. The appellant also relied on a Supreme Court ruling stating that mere non-submission of information is not sufficient to prove suppression, requiring a positive act with deliberate intent. They highlighted the confusion in the field regarding packaged drinking water and mineral water, emphasizing that there was no intention to evade payment of duty.

Issue 3: Extended period of limitation invoked by the Revenue
The Revenue alleged suppression on the part of the appellant for not registering with the Department, invoking the extended period of limitation. However, the Tribunal noted that something positive, beyond mere inaction or failure, is required to establish liability. As the demand was raised after the Revenue became aware of the manufacturing activity in May 2009, the demand issued in November 2010 was held to be beyond the permissible time limit, rendering it invalid. Consequently, the Tribunal set aside the impugned order, allowing the appeal and entitling the appellant to consequential relief as per law.

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