2023 (9) TMI 805 - CESTAT KOLKATA

Revenue neutrality - clearance of goods without payment of duty - period involved in the year 2010- 2011 to 2014-2015 and the show-cause notice has been issued on 23.03.2016 - time limitation - HELD THAT:- It is fact on record that the appellant has cleared the goods from their unit without payment of duty to their sister unit and the said sister unit cleared the said coals on payment of duty. Although it is a situation of revenue neutrality, but the appellant was monthly required to pay duty at the time of clearance from the transferor unit, otherwise, the Central Excise Act will become redundant - thus, at the time of clearance of goods, the appellants were liable to pay duty.

Time Limitation - HELD THAT:- In the facts and circumstances of the case that when the fact of clearance of coals from the transferor unit without payment of duty was in the knowledge of the respondent as various correspondences were made during the impugned period and the show-cause notices have been issued to the appellant by invoking extended period of limitation, in that circumstances, it is held that whole of the demand is barred by limitation. Accordingly, on limitation, the appellants succeed.

Thus, on merit appellants are liable to duty, but on limitation, the show-cause notice fails - appeal allowed.