2009 (8) TMI 941 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty and penalty imposition based on exemption benefit availed.
2. Appeal disposal on the ground of limitation.
3. Invocation of longer period of limitation due to wrongful exemption claim.

Analysis:
1. The judgment pertains to the confirmation of duty and penalty imposed on the appellant for clearing embroidery on fabrics by availing exemption benefits not available to them under specific notifications. The Commissioner of Central Excise upheld the duty and penalty based on the grounds that the appellant wrongfully claimed exemption to evade central excise duty on the clearances of embroidery fabrics.

2. The appellant argued on merits, but the appellate tribunal found that the appeal could be disposed of on the short ground of limitation. The show cause notice was issued to the appellant for clearances made during a specific period. The appellant contended that the clearances were known to the department, but the Commissioner justified the demand notice within the extended period as per the Central Excise Act, 1944.

3. The Commissioner invoked the longer period of limitation due to the appellant's wrongful exemption claim, despite the department's knowledge of the facts. However, the tribunal held that claiming exemption with revenue's knowledge does not equate to suppression or misstatement with malicious intent to warrant an extended limitation period. The tribunal highlighted the appellant's prior communication with the department regarding the nature of fabrics and the surrender of registration certificate as evidence against invoking the longer limitation period.

In conclusion, the tribunal set aside the impugned order and allowed the appeal solely on the point of limitation, emphasizing that claiming exemption with the revenue's awareness does not justify extending the limitation period for duty demand and penalty imposition.