2024 (9) TMI 174 - AT - Central Excise

Revenue cannot invoke extended limitation period under Section 11A without first challenging refund orders

M/s. Vardhman Products, M/s. Atishay Pure Products, M/s. Valley Products, Mukesh Kumar Patni M/s. Atishay Pure Products, Shri Manoj Kumar Jain M/s. Vardhman Products, Shri Gyanendra Kumar Patni, Partner M/s. Vardhman Products, Shri Rupak Saha, Ex-Director M/s. Samrat Food Pvt. Ltd. Versus Commissioner of Central Excise, Shillong

The CESTAT Kolkata set aside demands raised under Section 11A of the Central Excise Act, 1944, ruling that the Revenue could not invoke extended period of ... Time Limitation - periodical refunds of duty paid under Section 4A have been sanctioned in terms of Notification No. 32/99-CE dated 08.07.1999, which were never challenged and had attained finality - HELD THAT:- It is found that, as held in the decision of COMMISSIONER OF CENTRAL EXCISE, VERSUS M/S. JELLALPORE TEA ESTATE [2011 (3) TMI 11 - GAUHATI HIGH COURT], the Revenue could not have raised the demands under Section 11A of the Central Excise Act, 1944, without challenging the refund sanctioning orders. As it has been clarified that appellants are required to pay duty on MRP basis and they are entitled to avail abatement vide Notification No. 14/2008-CE(NT) dated 01.03.2008, in that circumstances, the extended period of limitation is not invokable as the date and method of payment of duty was known to the Department and appellants have paid duty as per the clarification given by the Department. There are substance in the ld. counsel's arguments that, in such a scenario it was not open to the revenue to take recourse to the extended period of limitation. It is also found that prior to the DGCEI's investigations in the month of October 2010, the Anti Evasion Unit had also visited the appellant's premises, issued spot summons and seized documents. The appellant no.2 also had undergone audit prior to the impugned proceedings and the issue of assessment under Section 4A had not been raised by the Audit. Accordingly, the appellants succeed on limitation. As there is no demand sustainable against the appellants on limitation, therefore, no penalty can be imposed on the appellants. The impugned order set aside - appeal allowed. Issues:Violation of Excise Act, Duty Payment, Refund Claims, Period of Limitation, Impugned Order, Challenge on Merits, Concessional Notification, Extended Period of Limitation, Finality of Refund Claims, Revenue's Position, Department's Clarification, Audit Findings, Penalty Imposition.Detailed Analysis:1. Violation of Excise Act and Duty Payment:- Appellant nos. 1 and 2 were manufacturers of excisable products like 'Pan Masala,' 'Churna for Pan,' and 'Sweet Supari.'- Appellant no. 3 was involved in relabelling and selling Sweet Supari purchased from appellant no. 1.- Show cause notice issued alleging violations of Section 4 and Section 11D of the Excise Act for the period 2007-08 to 2009-10.2. Refund Claims and Period of Limitation:- Appellants contended that refund claims under Notification No. 32/99-CE were sanctioned and not challenged, attaining finality.- Argument made against the invocability of the extended period of limitation due to the refund claims' finality and Department's clarification on duty payment.3. Challenge on Merits and Impugned Order:- Appellants admitted no case on merits but contested the issue on limitation.- Ld. adjudicating authority upheld demands and penalties against appellants.4. Concessional Notification and Finality of Refund Claims:- Appellants availed benefits under Notification No. 32/99-CE for duty refunds through PLA.- Refund claims were sanctioned, unchallenged, and achieved finality, supporting the argument against the extended limitation period.5. Revenue's Position and Department's Clarification:- Revenue supported the impugned order, asserting no case on merits for appellants.- Department's clarification on duty payment method based on MRP and abatement under Notification No. 14/2008-CE(NT) was highlighted.6. Audit Findings and Penalty Imposition:- Audit conducted at appellant no. 1's premises revealed no issue of assessment under Section 4A raised.- Appellants succeeded on limitation grounds due to audit findings and lack of demand sustainable against them.7. Outcome and Relief Granted:- Impugned orders set aside on the ground of limitation, allowing appeals with consequential relief.- No penalty imposed on appellants due to no sustainable demand against them.This detailed analysis of the judgment highlights the key issues of violation of the Excise Act, duty payment, refund claims, challenges on merits, extended period of limitation, audit findings, and the ultimate relief granted to the appellants based on the grounds of limitation.