TaxTMI 
TaxTMI 
2020 (2) TMI 302
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....ern Zonal Bench, Ahmedabad (for short 'the Tribunal') in Appeal No.E/884-885/2012. 2. The revenue has proposed the following questions as substantial questions of law: "(i) Whether the Tribunal committed an error in ignoring the provisions of Section 36A of the Central Excise Act, 1944, by ignoring the facts and relevant rules and provisions available on record? (ii) Whether the Tribunal committed an error in holding the demand as time barred, by ignoring the facts available on record? (iii) Whether the Tribunal was right in setting aside penalties imposed against the respondents?" 3. The facts may be summarized as under: 3.1. The respondent participated in the auction proceedings of sale of property and ....
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....posed to demand and recovery of Central Excise Duty of Rs. 5 Lakhs under the proviso to Section 11A(1) of the Central Excise Act, 1944, with interest and also penalty under Rule 25 of the Central Excise Rule, 2002. 3.6. Another show cause notice, dated 15.05.2008, was issued by the Commissioner of Central Excise, invoking larger period of limitation under the proviso to Section 11A(1) of the Act, proposing to demand/recovery Excise duty of Rs. 1,25,93,132/- on the scrap, unserviceable and condemned scooters and parts thereof, dismalting plant and machinery which were sold by the respondent. The bank guarantee of Rs. 5 Lakhs furnished by the respondent was encashed by the Excise Authorities which was challenged before the Commissioner (A)....
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....uch or after dismantling the same, such activity does not amount to manufacture activity and therefore, the same would not be liable for levy of excise duty. It was submitted that the goods were sold as waste and scrap and only the excise duty of waste and scrap can be demanded if such waste has arisen during course of manufacturing activity of excisable goods, which was not the fact in the case of the respondent, as the respondent was only a purchaser of goods in auction and seller of the same. It was also submitted that extended period of limitation could not have been invoked in the facts of the case, as the right from purchase of goods in auction till the sale thereof, entire activity of sale was well withing the knowledge of the Depart....
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.... department's proceedings to demand any Excise Duty from the appellant. As per the judgments cited by Ld. Counsel on behalf of the appellant it is settled that merely sale of parts by dismantling any capital goods is not liable for excise duty. As regard limitation, we find that the entire facts of purchase of goods under auction and sale thereof were well within the knowledge of the department. Therefore, the department if at all was of the view that any duty liability arise, they were free to issue a Show Cause Notice well within the normal period of limitation provided under section 11A(1). However, after having all the facts within the knowledge of the department, they have delayed in issuing the Show Cause Notice and the Show Cause Not....