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2022 (6) TMI 706 - Central Excise
Head Note / Extract:
Benefit of exemption - Bonafide belief - Manufacture of textile machineries - Applicability of N/N. 06/2002 dated 01.03.2002 - Relax Drum washer Machine - extended period of limitation - proviso to section 11A of the Central Excise Act, 1944 - HELD THAT:- As regard the merit of the case that whether the appellant is eligible for exemption Notification No 06/2006-CE or otherwise, the issue attained finality as per the tribunal’s order in the case of COMMISSIONER OF CENTRAL EXCISE & ST., SURAT AND OTHERS VERSUS M/S. BHAGYAREKHA ENGINEERS PVT. LIMITED AND OTHERS [2014 (8) TMI 778 - CESTAT AHMEDABAD] against the appellant - It was held in the said case that all the machines specified in each of the heading of List 6 or List 2 respectively of Notification No. 6/2002-CE and 6/2006-CE convey only those machine which carried out a specific activity. Accordingly, Sr. No. 6(5) and 2(5) of the relevant exemption notifications has to be considered to be applicable only to the categories of drying machines. As the machine manufactured by the manufacturers is not a drying machine, therefore the benefit of above exemption notifications is not available to the impugned manufacturers. As regard the appellant’s belief whether it is the bona fide or otherwise it is observed that it is not only the appellant but there are other manufacturers also who were under the bona fide belief that the goods in question is covered under the exemption Notification No 06/2006-CE . It is evident from the case of M/S ACCURATE TRANS HEAT PVT. LTD. SHRI KEDARMAL MANGILAL DERGER VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT [2018 (7) TMI 973 - CESTAT AHMEDABAD], in that case also the assessee for the same machine were claiming the exemption notification - From the verification report, it is clear without any doubt that the range superintendent has verified the manufacturing activity physically and thereafter given the report that the product which is manufactured by the appellant is eligible for exemption under notification No. 06/2006-CE. The appellant thereafter filed ER- 1 return on 27.02.2008 therefore, all the information regarding the nature of goods claimed for exemption notification was within the knowledge of the department. Extended period of limitation - suppression of facts or not - HELD THAT:- Once an assessee claim exemption notification and the same is in the knowledge of the department, the department firstly to do the proper verification to ascertain whether the goods on which exemption is claimed is covered under the notification or otherwise. The belief of an assessee may be right or wrong but it is incumbent on the department to ascertain the correctness of the eligibility of the exemption notification. Therefore, by declaring the goods under exemption there cannot be a charge of suppression of fact on the part of the appellant. In the identical case, this tribunal in the case of M/S ACCURATE TRANS HEAT PVT. LTD. SHRI KEDARMAL MANGILAL DERGER VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT [2018 (7) TMI 973 - CESTAT AHMEDABAD] held that there is no suppression of fact and the demand of extended period was set aside - The present case is on better footing on the ground that the superintendent has carried out the verification and specific report in respect of the claim of exemption notification No 06/2006-CE was reported. Thus, there is no suppression of fact with intent to evade payment of duty on the part of the appellant. In the present case the demand for the period 15.04.2004 to February 2008 was raised by the Show cause notice dated 06.04.2009 hence the entire demand is prior to normal period of one year, therefore the same is hit by the limitation - the demand raised in the SCN and confirmed by the Adjudicating Authority is not sustainable being time barred. Appeal allowed - decided in favor of appellant.