2017 (1) TMI 752

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....ship firm and engaged in the manufacture of articles of Steel, Nuts and Screws of brass falling under Chapter 73 and 74 of the Central Excise Tariff Act 1985. During the year 2004-2005, the appellant has availed the benefit of SSI Exemption under Notification 9/2003-CE dated 01.03.2003. During the audit, it was found that the appellant during the period from July 2004 to December 2004 had exported the goods at the rate of 9.6% and that the value of export clearances had not been included in the computation of the first clearance of Rs. 100 lakhs. On these allegations, the Department issued a show-cause notice dated 26.03.2007 and demanded the differential duty of Rs. 3,89,640/- (Rupees Three Lakhs Eighty Nine Thousand Six Hundred and Forty ....

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....epartment. He further submitted that the show-cause notice was issued in March 2007 which is much after the expiry of limitation of one year and in the show-cause notice extended period of limitation has not been invoked under provisions of Section 11A(1). Hence the entire demand is void ab initio. In support of this submission, he relied upon the decision in the case of CCE Vs. Rajasthan Textile Mills 1997 (94) 481 (SC) wherein the Apex Court has held as follows: "...We have already mentioned that there was nothing in the show-cause notice dated February 7, 1983 to indicate that the conditions prescribed in the proviso to Section 11A of the Central Excise Act for invoking the extended period of limitation were present. In the circ....

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.... be excluded for the purpose of first clearances up to Rs. 100 lakhs. He further submitted that the appellant has violated the Notification and is liable to pay the differential duty. 5. After considering the submissions of both the parties, we find that in this case the entire demand is time-barred. The period of dispute in the case is from July 2004 to December 2004 and the show-cause notice was issued in March 2007 which is much after the expiry of the period of limitation of one year. Moreover in the show-cause notice, extended period of limitation has not been invoked and there are no reasons given in the show-cause notice for invoking the extended period of limitation. Further we find that the judgment of the Supreme Court in the c....