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KIRAN ISPAT UDYOG Versus COMMISSIONER OF CENTRAL EXCISE, RAJKOT

2015 (8) TMI 998 - SUPREME COURT

Invocation of extended period of limitation - SCN issued beyond the period of 6 months - Applicability of exemption Notification No. 208/83, dated 1-8-1983 - Non fulfillment of conditions of notifications - Held that:- It would be clear from the judicial journey that the issues involved in the present case remained entangled in judicial battle for quite some time and only in the year 2002, the hazy picture was clarified. In such a scenario, if the appellants took the decision that they were fulf .....

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her than waiting for number of years before issuing the show cause notice. - show cause notices were time-barred and extended period of limitation was not available to the respondents - Decided in favour of assessee. - Civil Appeal Nos. 3043-3056 of 2004 with Civil Appeal No. 2642 of 2005 - Dated:- 1-4-2015 - A.K. Sikri and Rohinton Fali Nariman, JJ. ORDER Before us, in these appeals, are 14 appellants who have challenged the order of the Customs, Excise and Gold (Control) Appellate Tribunal (he .....

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ese appeals only on the ground of limitation arguing that the show cause notices issued to all the appellants were beyond the period of six months and therefore, were time-barred. It is this aspect which needs to be determined in the present appeals. The periods which are involved for which the duty is demanded and the dates on which the show cause notices were issued to each of the appellants are mentioned in tabulated form hereunder :- S. No. Name Statements Period Show Cause Notice 1. Yogesh .....

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1986; 4-6-1987; 25-9-1987 22-3-1985; 15-9-1987 31-10-1998; 17-11-1988 7. Krishna Steel Rolling Mills 16-12-1986 9-8-1987 6-10-1987 7-8-1987 1-3-1986; 15-9-1987 31-10-1998; 17-11-1988 8. Diamond Industries 15-12-1986; 27-5-1987; 7-10-1987 18-7-1985; 15-9-1987 8-9-1988 9. Kiran Ispat Udyog 15-12-1986; 11-6-1987; 18-9-1987 13-11-1984; 15-9-1987 2-1-1989 10. Satyanarayan Steel Industries 15-12-1986; 10-6-1987; 21-9-1987 5-6-1985; 15-9-1987 2-1-1989; 11-9-1989 11. Sachdeva Steel Products 15-12-1986; .....

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s-Department invoked the provision of proviso to Section 11A of the Excise Act on the ground that there was mis-representation on the part of the appellants and the action of the appellants were not bona fide and therefore the extended period of limitation of five years would apply in these cases. 3. In order to appreciate the aforesaid stand taken by the respondent, few facts relevant for determining the issue of limitation are recapitulated below :- 4. The appellants are engaged in m .....

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ial obtained from ship. Earlier, there was no excise duty on the aforesaid material and the exemption was provided by virtue of Notification No. 37/76 subject to fulfillment of certain conditions stated therein. However, this Notification was replaced by another Notification No. 208/83-C.E., dated 1-8-1983. Under this Notification, in order to avail the exemption, the conditions which were sought to be satisfied are mentioned in the proviso to the said notification which are as under : Provided .....

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the said rules. Explanation - For the purposes of this notification, all stocks of inputs in the country, except such stocks as are clearly recognisable as being non-duty paid, shall be deemed to be inputs on which duty has already been paid. 6. The Department took the view that insofar as appellants are concerned, they do not fulfill the two conditions stipulated in the aforesaid proviso and therefore, would be liable to pay the excise duty as they were not entitled to the exemption under .....

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ion. 8. We may mention at this stage that the issue as to whether the inputs used to manufacture final products are re-rollable scrap and hence would be classified as waste and scrap under Item No. 25(3) prior to 1986 and chapter Heading 72.03 after 1986, wherein Headings are not mentioned, was the subject matter of litigation. Certain circulars were issued by the Department in this behalf. There were conflicting judgments of the CEGAT. Matter was ultimately referred to the larger Bench. Th .....

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, Patna v. Usha Martin Industries [1997 (94) E.L.T. 460 (S.C.)] had taken the view favourable to the assessees. Therefore, till that time, the position as per these pronouncements was that the appellants were fulfilling these conditions contained in the Notification No. 208/83. However, in Motiram Tolaram v. Union of India [1999 (112) E.L.T. 749 (S.C.)], this court expressed doubts about the correctness of the view taken in Usha Martin Industries s case and referred the matter to Larger Bench. U .....

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ision that they were fulfilling the conditions mentioned in the Notification No. 208/83 and had not taken the licence under the Act, it cannot be stated that the aforesaid steps taken by the appellants were not bona fide. It is more so when the judicial opinion prevailing at that time was in favour of these persons. 10. The impugned judgment of the CEGAT shows that the two member Bench took the conflicting the view on the issue of limitation. One Member who took into consideration the afore .....

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ajority has held against the appellants is that the inaction on their part not to take the licence was not bona fide. We do not agree with the same. When the authorities ask the appellants to take licence in the year 1983 itself and the respondents did not comply, nothing prevented the authorities to take action against the respondents immediately, rather than waiting for number of years before issuing the show cause notice. We find that the minority view taken by the judicial Member was correct .....

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