CESTAT Mumbai: Demand set aside due to limitation; no mala fide intent found.

The Appellate Tribunal CESTAT, Mumbai, set aside the confirmation of demand due to limitation for duty amounting to Rs. 2,96,774. The Tribunal found contradictory observations on penalty, noting the absence of mala fide intent by the appellants to evade duty payment. As the appellants sought clarification before clearing the goods, indicating no intention to evade payment, the Tribunal allowed the appeal and provided relief to the appellants.

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Issues involved: Limitation period for demand of duty, intention to evade payment of duty, contradictory observations on penalty.

In the judgment by the Appellate Tribunal CESTAT, Mumbai, the issue of the demand of duty amounting to Rs. 2,96,774 being unsustainable due to limitation was addressed. The Commissioner of Central Excise (Appeals) noted the absence of mala fide intent by the appellants to evade duty payment. However, the Commissioner invoked a larger period of limitation for penalty. The Tribunal found the observations on confirmation of demand and penalty to be contradictory, as the appellants had sought clarification from the Assistant Commissioner before clearing the goods, indicating no intention to evade payment. Consequently, the confirmation of demand on the point of limitation was set aside, and the appeal was allowed with relief to the appellants.

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