1997 (9) TMI 110 - SC - Central Excise

Supreme Court rules show cause notice time-barred for lack of willful suppression.

The Supreme Court allowed the appeal, ruling that the show cause notice was time-barred as the Department failed to establish willful suppression of ... Demand - Limitation Issues Involved: Classification of input and limitation period for duty payment.For the issue of classification of input, the appellant, engaged in manufacturing iron and steel products, claimed benefit under Exemption Notification No. 208/83-C.E. The Collector of Central Excise issued a show cause notice alleging non-compliance with the notification and invoked the larger period of limitation under Section 11A of the Central Excises and Salt Act, 1944. The Tribunal upheld the Collector's decision, leading to the appellant's appeal.Regarding the limitation period, the Supreme Court found it unnecessary to delve into the classification issue, focusing solely on the limitation aspect. The Court emphasized that for the Department to benefit from the extended limitation period, willful suppression of facts must be proven. The proviso to Section 11A specifies conditions for invoking the longer limitation period, such as fraud or suppression of facts with intent to evade duty payment.The Court determined that the Department failed to establish willful suppression of facts in the case at hand. As the removal of goods was in line with the approved classification list and all relevant information was disclosed, the conditions for invoking the extended limitation period were not met. The Court concluded that the show cause notice exceeded the permissible limitation period, thereby allowing the appeal.In conclusion, the Supreme Court allowed the appeal, emphasizing that the proviso to Section 11A was not applicable due to the absence of willful suppression of facts. The Court held that the show cause notice was time-barred, leading to the appellant's success in the case.