1998 (4) TMI 294 - AT - Central Excise

Summary

Issues:
1. Whether the demand of duty for a specific amount is barred by time due to the issuance of the show cause notice beyond the limitation period.
2. Whether the appellant fulfilled the conditions of a specific notification for exemption.
3. Whether the production and clearance of a refrigerating appliance were suppressed by the appellant, allowing a 5-year limitation for the Revenue.

Analysis:

Issue 1:
The appellant argued that the demand of duty amounting to Rs. 6,15,287.95 is time-barred as the show cause notice was issued after the prescribed period for the financial years 1983-84 and 1984-85. The appellant relied on the case law of Bata India Ltd. v. Union of India, which stated that the assessable value should be calculated by deducting the duty element even for fully exempted goods. The appellant contended that this legal position prevented any wilful suppression of facts regarding the clearances under a specific notification. The Revenue, represented by Shri S. Nunthuk, countered that the appellant did not fulfill the conditions of the notification, as the required declaration was not submitted. However, the Tribunal agreed with the appellant's argument, citing the Bata India case law, and held that the demand of duty was time-barred beyond the normal limitation period of 6 months.

Issue 2:
The appellant's counsel highlighted the importance of the benefit under Notification 64/83-C.E., emphasizing the deduction of the duty element from the sale price for the availability of the exemption. Although this plea was not taken on merit, the appellant argued that it should be considered for limitation purposes, referencing the Pushpam Pharmaceuticals case law. The Tribunal agreed with the appellant's interpretation of the law and set aside the demand of duty without delving into other merit-related questions.

Issue 3:
Shri Nunthuk contended that the production and clearance of a refrigerating appliance were suppressed by the appellant, justifying a 5-year limitation period for the Revenue. However, the Tribunal's decision on the first issue regarding the time-barred demand rendered this argument moot, and the demand of duty was ultimately set aside without further examination of the suppression allegation.

In conclusion, the Appellate Tribunal CEGAT, New Delhi, ruled in favor of the appellant, setting aside the demand of duty based on the time limitation issue and the legal interpretation regarding the calculation of assessable value for fully exempted goods. The Tribunal did not delve into other substantive issues due to the time-barred nature of the demand.