The CESTAT held that the appellant did not suppress facts with...

The CESTAT held that the appellant did not suppress facts with intent to evade central excise duty, as records were properly maintained, VAT compliance was followed, and transactions were transparent. Although the appellant crossed the Rs. 1.5 crore threshold for excise duty liability based on MRP less abatement, the extended period of limitation for recovery could not be invoked due to lack of intent to evade duty. Allegations of clandestine clearance were unsubstantiated. The demand confirmed under extended limitation was unsustainable, and since the appellant did not dispute duty liability before the Commissioner (Appeals), the Tribunal limited its consideration to penalties. Penalties imposed on the appellant firm were set aside due to bona fide belief and proper record-keeping. Penalty on the proprietor was also quashed to avoid double jeopardy, as the firm and proprietor are one entity. The appeal was allowed and penalties were set aside.