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2011 (4) TMI 380 - AT - Central ExciseExcise ability and duty-ability of the Lay Flat Tub - Intermediate goods - Period of limitation - penalty of identical amount under Section 11AC - Appellants are engaged in the manufacture of plastic bags - Held that - t stands contended by the appellant that they were the members of the Plastic Industry Association and were being guiding by the said association for non payment of duty on the LFT. It seems that there was a general impression in the field as regards the non-excisability of the said LFT emerging during the course of final product. The impugned orders do not refer to any evidence indicating any positive suppression or mis-declaration on the part of the assessee so as to invoke the longer period of limitation. - Demand and penalty set aside.
Issues:
Classification of Lay Flat Tub (LFT) for excise duty, demand of duty and penalty imposition, invocation of longer period of limitation for duty demand. Classification of Lay Flat Tub (LFT) for excise duty: The dispute in the appeal pertains to the excisability and duty-ability of Lay Flat Tub (LFT) used in the manufacture of plastic bags. The lower authorities confirmed the duty demand for LFT under Chapter heading 3917 for a specific period and imposed a penalty for non-payment of duty. The Tribunal referred to a previous decision where it was held that LFT attracted central excise duty during a particular period. However, the Tribunal extended the benefit of limitation to the appellants in that case. The Tribunal emphasized that to demand duty beyond the normal period, there must be evidence of fraud, collusion, wilful misstatement, or suppression of facts to evade payment of duty. As no such mala fide intention was proven in this case, the entire demand of duty was deemed time-barred, and no penalty was imposed. Demand of duty and penalty imposition: A duty amount was confirmed against the appellants along with a penalty under Section 11AC of the Act for the period in question. The show cause notice for this demand was issued beyond the normal period of limitation. The Commissioner (Appeals) relied on a Tribunal decision to confirm the duty demand but did not follow the same decision regarding the invocation of a longer period. The Tribunal noted that mere non-filing of registration and declarations cannot be sufficient reasons to invoke a longer period. Positive suppression or misdeclaration with an intent to evade duty must be proven for the longer period to apply. The appellants argued they were guided by the Plastic Industry Association regarding duty payment on LFT, and there was a general impression in the industry about the non-excisability of LFT. As no evidence of positive suppression or misdeclaration was presented, the Tribunal set aside the impugned order and allowed the appeal on the point of limitation. In conclusion, the Tribunal set aside the duty demand and penalty imposition due to the absence of evidence showing an intent to evade duty beyond the normal limitation period. The decision emphasized the necessity of proving fraud or suppression for invoking a longer period for duty demand.
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