2016 (11) TMI 780 - AT - Central Excise

Opting out of Compounded Levy Scheme - demand of duty alongwith interest and penalty - conversion of cold rolled stainless steel patti/patta from hot rolled stainless steel patti/patta - Held that - reliance placed on the decision of the case 2015 (12) TMI 743 - SUPREME COURT where it was held that the process of cold rolled steel from hot rolled steel amounts to manufacture - the activity undertaken by the appellant amounts to manufacture. In that circumstance the appellant is liable to pay duty alongwith applicable interest during the impugned period. Invocation of extended period of limitation - Held that - The appellant has stopped paying duty with effect from 1.4.2000 till 31.3.2001 and no reason has been stated by the appellant why they stopped paying duty. Moreover the intention of the appellant to suppress the facts is made clear from their act of filing nil ER-I returns. As the appellant has suppressed their clearance of cold rolled steel patta and patti from the department by showing nil ER-I returns and from 1.1.2002 the appellant has resumed paying duty on their activity by understanding that their activity amounts to manufacture In that circumstance we hold that the adjudicating authority has rightly invoked the extended period of limitation. Appeal dismissed - decided against appellant.

Summary

Issues: Appeal against duty demand and penalty imposition, whether the conversion activity amounts to manufacture, applicability of extended period of limitation.

Analysis:
1. Duty Demand and Penalty Imposition: The appellants contested the duty demand and penalties imposed, arguing that the conversion of cold rolled stainless steel patti/patta from hot rolled stainless steel patti/patta does not constitute manufacturing, citing Supreme Court decisions. However, the AR opposed, referring to a different Supreme Court ruling that deemed the process as manufacturing. The tribunal upheld the duty demand, emphasizing that the latest Supreme Court decision settled the matter, holding the appellants liable for duty and interest during the relevant period.

2. Extended Period of Limitation: The appellants raised the issue of the extended period of limitation, contending that the demand was time-barred. They argued that since they were paying duty until a specific date and then stopped, the extended period should not apply. However, the tribunal noted that the appellants had prior knowledge of the Supreme Court ruling and continued to pay duty until ceasing abruptly without explanation. The tribunal found the appellants' actions, including filing nil ER-I returns, indicated an intent to conceal facts. Consequently, the extended period of limitation was deemed applicable, and the appeals were dismissed, upholding the impugned orders.

In conclusion, the tribunal ruled against the appellants, affirming the duty demand and penalties while invoking the extended period of limitation due to the appellants' actions. The judgment highlights the importance of compliance with legal obligations and the consequences of attempting to evade duties through misrepresentation or suppression of facts.