Extended period of limitation unsustainable in absence of suppression of fact

Ashok Iron Works (P) Ltd Vs Commissioner of Central Excise (CESTAT Bangalore)

CESTAT Bangalore held that differential duty demand for extended period of limitation unsustainable in absence of suppression of fact. Accordingly, interest and penalty for extended period set aside.

Facts- The appellants are engaged in the manufacture of excisable goods viz., C.I. raw castings, C.I. machined components, et., under Chapter 72, 73, 84 & 87 of Central Excise Tariff Act, 1985. They were clearing the goods on payment of duty on the assessable value declared by them. By raising supplementary invoices, subsequent to removal of goods, the appellants discharged differential duty on the differential value collected under supplementary invoices but failed to pay interest on the differential duty paid against the supplementary invoices. Even after repeated letters, pursuant to Audit objection, issued to the appellants in both the cases, they failed to respond by submitting details of supplementary invoices raised and differential duty paid from time to time. However, subsequently, they responded to the summons and furnished the amount of differential duty paid during the relevant period from August 2008 to March 2013 in Appeal No. E/21581/2014 pertaining to Plant-I and for the period from 2008-09 to 2012-13 in Appeal No. E/21583/2014 for Plant-III. Thereafter, demand for recovery of interest amounting to Rs.4,84,348/- and Rs.15,85,230/- under Section 11AB of Central Excise Act, 1944, respectively, was made by issuing show cause notice invoking extended period limitation. On adjudication, demands have been confirmed and penalty of Rs.5,000/- under Rule 27 of Central Excise Rules, 2002 in each case has been imposed. Hence, these appeals.

Conclusion- We find that in the aforesaid judgments, it has been observed that on declaration of the differential duty paid by reflecting the same in the relevant monthly returns filed with the department from time-to-time, would not fall within the scope of suppression of fact and accordingly, extended period of limitation was set aside in those cases. Following the principle laid down in the aforesaid cases and change in law with regard to applicability of period of limitation for recovery of interest incorporated at sub-section (15) in Section 11A of CEA,1944 with effect from 08.4.2011, in our opinion, the demand of interest can be sustained only for the normal period. Accordingly, the impugned order is modified to the extent of confirming recovery of interest for the normal period. Since there is no suppression of fact, we do not consider imposition of penalty, in the circumstances of the case, is warranted. Appeal is partially allowed to the extent mentioned as above.

FULL TEXT OF THE CESTAT BANGALORE ORDER

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