2006 (4) TMI 127 - SC - Central Excise

Whether the appellant supplying carbon dioxide to another unit as per agreement dated 19-3-1983 had not taken necessary licence & had not followed the procedure prescribed under the rules and had not discharged duty liability Held that - Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. Thus there was no suppression of facts on the part of the assessee/appellant. For the reasons stated above Civil Appeal Nos. 2747 of 2001 and Civil Appeal No. 6261 of 2003 filed by the assessees are accepted and the impugned orders are set aside on the question of limitation only. The demands raised against them as well as the penalty if any are dropped. Civil Appeals @ Special Leave Petition (C) Nos. 9271-9278 of 2003 filed by the department are dismissed.

Summary

Issues involved:
1. Delay condonation and leave granted in SLP(C) Nos. 9271-9278/2003.
2. Common point of law in Civil Appeal Nos. 2747 of 2001, Civil Appeal No. 6261 of 2003, and Civil Appeals @ Special Leave Petition (C) Nos. 9271-9278 of 2003.
3. Appeals under Section 35L(b) of the Central Excise Act, 1944 against Final Orders of the Tribunal.
4. Allegations of duty evasion on impure carbon dioxide production.
5. Multiple Show Cause Notices (SCNs) issued covering different periods.
6. Adjudication of demands raised in SCNs by the Tribunal.
7. Argument on extended period of limitation based on suppression of facts.
8. Precedents on limitation issues from previous judgments.
9. Finding of no suppression of facts by the appellant.
10. Disposition of appeals based on limitation grounds only.

Analysis:

1. The Supreme Court granted leave in SLP(C) Nos. 9271-9278/2003 after condoning the delay. The appeals involved a common legal issue, leading to a consolidated judgment.

2. The appeals were filed under Section 35L(b) of the Central Excise Act, 1944 against Final Orders of the Tribunal. The assessees and the revenue challenged the Tribunal's decisions in separate appeals.

3. The cases revolved around allegations of duty evasion related to the production of impure carbon dioxide. SCNs were issued to the appellant covering different periods, accusing them of contravening excise rules.

4. The appellant contested the duty demands based on earlier decisions and argued against the imposition of duty on impure carbon dioxide production.

5. Multiple SCNs were served on the appellant, alleging violations and duty liabilities for different periods. The adjudicating authority confirmed the demands raised in the SCNs.

6. The appellant appealed to the Tribunal against the orders of the adjudicating authority. The Tribunal's decision was based on the classification of impure carbon dioxide under the Central Excise Tariff Act, 1986.

7. The appellant argued against the extended period of limitation, citing previous judgments where the invocation of extended limitation was questioned based on the knowledge of authorities regarding the facts.

8. The Supreme Court referred to previous judgments to support its decision on the limitation issue. It emphasized that the repeated issuance of SCNs based on the same facts does not constitute suppression of facts by the assessee.

9. The Court concluded that there was no suppression of facts by the appellant, agreeing with the precedents cited. As a result, the demands and penalties were dropped based on the limitation grounds.

10. The Court accepted the appeals filed by the assessees and dismissed the appeals filed by the revenue solely on the question of limitation. The classification and marketability issues were left open, and each party was directed to bear its own costs.