2004 (3) TMI 703 - AT - Central Excise

Summary

Issues:
1. Whether the goods exported to Nepal under bond are exempted goods.
2. Whether the extended period of limitation for demanding duty under Section 11A(1) of the Central Excise Act is invocable.

Analysis:
1. The appellant, a manufacturer of crane parts, claimed SSI exemption under Notification No. 9/2000-C.E. for goods exported to Nepal under bond without payment of duty. The dispute arose when a show cause notice was issued beyond the normal one-year period specified in Section 11A(1) of the Central Excise Act, alleging that the value of goods exported to Nepal should be included in the aggregate value for home consumption, making the appellant ineligible for SSI exemption in the subsequent year. The appellant argued that as per the notification, goods exempted from duty or on which no duty is payable should not be considered for determining the aggregate value. They contended that since the goods were exported to Nepal without duty payment, they fall under this exemption clause.

2. The Revenue countered by citing an explanation in Notification No. 9/2000 stating that clearances for export to Nepal must be included in the value for home consumption. They argued that the extended period of limitation is applicable as the appellant did not declare the correct value of clearances, leading to suppression of facts. The Revenue claimed that filing an RT-12 return does not absolve the appellant of deliberate non-inclusion of export values to Nepal, which is considered suppression under self-removal procedure.

3. The Tribunal considered both arguments and noted that the appellant had clearly indicated the separate values of clearances for home consumption and goods sent to Nepal in the RT-12 return filed with the department. The Tribunal referred to a Supreme Court case emphasizing that demanding duty beyond the normal period requires proof of fraud, collusion, wilful misstatement, or suppression of facts with intent to evade duty payment. Since the appellant had disclosed the Nepal export values, no mala fide intent was found. Consequently, the Tribunal ruled that the extended period for demanding duty cannot be invoked, setting aside the duty demand as time-barred. The penalty on the appellant was also waived due to the time limit ruling.

4. The appeal was allowed in favor of the appellant, with any consequential relief granted to them.

Judgment: The Tribunal ruled in favor of the appellant, holding that the demand for duty was time-barred as the appellant had disclosed the export values to Nepal, negating any intent to evade duty payment. The penalty was also set aside due to the time limit ruling.