1995 (1) TMI 235 - AT - Central Excise

Tribunal rules demand not time-barred, rejects appeal on exemption limit breach.

The Tribunal held that the demand was not time-barred as the show cause notice was issued within the stipulated period. The appellants were not entitled ... Demand - Limitation Issues:1. Whether the demand was barred by time.2. Whether the appellants were entitled to claim exemption under Notification No. 83/83-C.E., dated 1-3-1983.3. Whether the assessment was provisional or final.4. Interpretation of Section 11A of the Central Excises and Salt Act.5. Application of Proviso (3)(ii)(b) of Section 11A in the case.Analysis:Issue 1: Whether the demand was barred by time.The appellants argued that the demand was time-barred as there was no suppression of facts, and the show cause notice did not allege any suppression. They contended that the demand could only be sustained for a period of six months prior to the issuance of the show cause notice. They relied on the decision in the case of J.K. Paints v. Collector of Central Excise. However, the Revenue contended that the demand was not time-barred as the assessment remained provisional until the clearance exceeded the exemption limit. The Tribunal held that the demand was not barred by time as the show cause notice was issued within the stipulated period.Issue 2: Whether the appellants were entitled to claim exemption under Notification No. 83/83-C.E., dated 1-3-1983.The appellants conceded that they were not entitled to claim exemption under the notification as the value of their clearance exceeded the prescribed limit of Rs. 25 lakhs during the relevant period. The Tribunal agreed with this concession and held that the benefit of the exemption notification was not available to the appellants.Issue 3: Whether the assessment was provisional or final.The Tribunal observed that the assessment remained provisional until the clearance exceeded the exemption limit. The assessment could only be finalized at the end of the financial year or when the RT 12 return showing the limit had been exceeded was filed. The Tribunal concluded that the assessment was provisional until the relevant information was known.Issue 4: Interpretation of Section 11A of the Central Excises and Salt Act.The Tribunal analyzed Proviso (3)(ii)(b) of Section 11A, which pertains to cases where excise duty is provisionally assessed. The Tribunal held that in cases of provisional assessment, the date of adjustment of duty after the final assessment is relevant. The Tribunal interpreted the provisions of Section 11A in light of the facts of the case to determine the timeliness of the demand.Issue 5: Application of Proviso (3)(ii)(b) of Section 11A in the case.The Tribunal applied Proviso (3)(ii)(b) of Section 11A to the case, considering the factual and legal position. The Tribunal held that since the exemption limit was exceeded in December 1984, the show cause notice issued in February 1985 was well within the time limit. The Tribunal rejected the appeal based on this interpretation of the relevant legal provisions.This detailed analysis of the judgment highlights the key legal issues involved and the Tribunal's reasoning in deciding each issue.