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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>Extended period of limitation in central excise assessments denied where routine audit detects issues; time bar set aside orders.</h1> Extended period of limitation for excise demand cannot be invoked where there is no pleaded or evidenced suppression, mis-statement or collusion; ... Extended period of limitation - bar of limitation - suppression, mis-statement, mis-declaration - self-assessment regime and duty of the officer to scrutinise returns - best judgment assessment - routine audit versus officer's responsibility - HELD THAT:- Appellants submit that there is no suppression, mis-statement, mis-declaration, collusion etc. on the part of the appellants. We find that the same has not been alleged with evidence in the show cause notice. We find that the only case of the Department is that but for the audit, the alleged evasion could not have seen the light of the day. We understand that the appellants are regular assessees and are filing Returns regularly from time to time and are paying the applicable central excise duty. We find that Tribunal in a plethora of cases held that extended period cannot be invoked when the appellants have reasons to have an alternate interpretation of statutory provisions and more so, extended period cannot be invoked when the detection is on the basis of a routine audit conducted. Thus, we are of the considered opinion that Revenue has not made any case for invocation of extended period. Accordingly, we find that the impugned SCN is barred by limitation. Consequentially, the orders passed on the basis of SCN are liable to be set aside. As we find that the appeal merits to be allowed on limitation itself, there is no need to go into the merits of the case. Appeal is allowed. Issues: Whether the show cause notice demanding central excise duty based on handling charges is barred by limitation / whether extended period for issuance of notice is invocable.Analysis: The issue turns on whether suppression, mis-statement, mis-declaration or collusion sufficient to invoke the extended period has been established and on the statutory scheme allocating responsibility for scrutiny and assessment. Section 72 places an obligation on the Central Excise Officer to scrutinise returns and make best judgment assessments where returns are incorrect or incomplete. A mere discovery by routine audit, without allegations and evidence of concealment or collusion, does not satisfy the threshold for invoking the extended period. The departmental case that the matter surfaced only because of audit, without proof of deliberate suppression, does not discharge the requirement for extended limitation. Authorities and administrative guidance emphasise the officer's duty to detect escaped duty through return scrutiny, and extended period cannot be invoked where assessees have a plausible alternate interpretation and have been regularly filing returns.Conclusion: The show cause notice is barred by limitation and invocation of the extended period is not justified; consequential orders based on the notice are set aside in favour of the assessee.
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