Kamal Steel Fabricators Vs Commissioner of Central Excise (CESTAT Chandigarh)
The CESTAT Chandigarh allowed the appeal filed against the order dated 13.08.2015 passed by the Principal Commissioner, Central Excise & Service Tax, Faridabad-I, which had confirmed a central excise duty demand of ₹55,01,282 along with a penalty of ₹5 lakh under Rule 173Q of the Central Excise Rules, 1944.
The dispute originated from a show cause notice dated 04.06.1998 alleging that the appellant had collected central excise duty from Indian Railways, its customer, but had not deposited the amount into the Government exchequer in violation of Section 11D of the Central Excise Act, 1944. In an earlier round of litigation, the Tribunal, by Final Order No. A/30/2012-EX (DB) dated 11.01.2012, remanded the matter to the adjudicating authority for re-quantification after holding that the excise duty actually paid by the appellant at the time of clearance of goods from the factory should not be included in the total demand. Following the remand, the Commissioner again confirmed the demand of ₹55,01,282.
The appellant contended that the impugned order was barred by limitation and that the demand related to the period from 29.01.1990 to 19.09.1991, whereas Section 11D was introduced only with effect from 20.09.1991 and could not be applied retrospectively. Reliance was placed on Mahatma Sugar and Power Limited and Hindalco Industries Ltd., where Section 11D was held to operate prospectively. The appellant also argued that the show cause notice issued in 1998 was beyond a reasonable period and relied on Omid Engineering Pvt. Ltd. for the proposition that, even in the absence of a prescribed limitation under Section 11D, proceedings must be initiated within a reasonable time. It was further submitted that RT-12 returns and financial statements had been furnished, contrary to the finding in the impugned order that no proof of duty payment had been produced.
