2023-VIL-969-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Section 11A of Central Excise Act, 1944 – Invoking of extended period of limitation – Demand of differential duty – Appellant manufactures waste rubber granules and clears them after paying excise duty – Audit team scrutinized records and found that Appellant had sold goods to its parent company and paid duty on invoice values – Revenue felt that since it was a case of sale of goods to a related party, who in turn consumed goods captively, duty should have been paid at rate of 110% of cost of production as certified in CAS 4 certificates and not on invoice values – Revenue issued Show Cause Notice to Appellant proposing recovery of differential excise duty by invoking extended period of limitation under Section 11A of the Act – Assistant Commissioner confirmed demand of differential duty – Commissioner (Appeals) upheld order-in-original – Whether invoking of extended period of limitation is sustainable in facts and circumstances of case – HELD – Appellant is only contesting the demand on grounds of limitation – Entire period of demand is beyond normal period of limitation – Section 11A of the Act provides for a limitation of one year for issuing SCN – Said period can be extended to five years, in case, duty is not paid, short paid, not levied, short levied or erroneously refunded on account of fraud or collusion or willful statement or suppression of facts or violation of provisions of the Act with an intent to evade payment of duty – While assessee was required to self-assess duty and file ER-1 return, a check against such self-assessment was the scrutiny which officers were mandated to do – Audit is the next level of check against scrutiny by officers – If audit points out some wrong assessment which was not pointed out by officer scrutinising ER-1 return, fault lies at doorstep of officer and it does not by itself establish that assessee had suppressed any facts – If differential duty was chargeable but was not paid and it is later discovered by audit and it gets time barred under Section 11A of the Act, responsibility for it rests squarely on officers mandated to scrutinize returns in time and raise a demand in time – Since entire demand is beyond normal period of limitation, demand in impugned order or consequential interest and penalties cannot be sustained – Impugned order is set aside and appeal is allowed
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