1991 (4) TMI 271 - AT - Central Excise

Appellate Tribunal allows appeal, finds no suppression of facts, technical infringement condoned.

The Appellate Tribunal held that the extended period was not applicable in the case as there was no suppression of material facts and the Asstt. ... Demand - Limitation Issues:1. Appeal against order passed by Collector (Appeals) allowing department's appeal and setting aside Asstt. Collector's order.2. Allegation of utilizing goods before 48 hours as per Rule 56A of Central Excise Rules.3. Dispute regarding invoking the extended period due to procedural infraction.4. Argument of no intention to avail proforma credit for goods not received.5. Contention on suppression of vital information for revenue importance.6. Decision on whether extended period is applicable in the case.Analysis:The appeal before the Appellate Tribunal CEGAT, BOMBAY was against the order passed by the Collector (Appeals) which allowed the department's appeal and set aside the Asstt. Collector's order. The case involved the appellants availing proforma credit facility under Rule 56A of the Central Excise Rules. A show cause notice was issued alleging that goods were taken into use before the prescribed 48-hour verification period. The Asstt. Collector set aside part of the demand but confirmed recovery of duty amounting to Rs. 3699.54. The department appealed, and the Collector (Appeals) invoked the extended period, leading to the appeal before the Tribunal.The appellant's consultant argued that there was no allegation of suppression in the show cause notice and no mala fide intention, thus questioning the invocation of the extended period. It was contended that the procedural infraction did not involve diversion of goods or intention to avail credit for goods not received, and the amount in question was insignificant, leading to its payment without prolonging the issue.On the other hand, the JDR for the department argued that the failure to wait for 48 hours before using the goods was significant for revenue verification purposes, justifying the invocation of the extended period due to the alleged suppression of vital information.After considering both arguments, the Tribunal found merit in the appellant's case. It was noted that there was no allegation of diversion of received inputs, and the technical infringement of not waiting for 48 hours could be condoned if actual receipt and utilization of goods were established. The Tribunal agreed that the extended period was not applicable in this case, as there was no suppression of material facts and the Asstt. Collector's order did not warrant interference, particularly regarding the demand beyond six months. Consequently, the appeal was allowed, and the order of the Collector (Appeals) was set aside.