2025-VIL-548-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Extended period of Limitation, Suppression of Facts, Penalty, Export without Payment of Duty - Appellant was engaged in manufacturing of articles of jewellery falling under Chapter Heading 7113 of CETA. Investigations revealed that the appellant had not paid central excise duty on the articles of jewellery manufactured and cleared by them during the period 1.03.2016 to 30.06.2017 - Whether the extended period of limitation can be invoked to raise the demand under Section 11A(4) of the Central Excise Act, 1944 – HELD - The extended period of limitation under Section 11A(4) cannot be invoked in the present case as it is not a case of fraud, collusion, wilful misstatement, suppression of facts, or contravention of any provisions of Act/Rules with an intent to evade payment of duty. The appellant had fully cooperated with the department and submitted all the requisite documents which the department had called upon from time to time. The appellant had also paid the excise duty on the basis of self-assessment by 28.11.2017 - Mere non-payment of duty or omission to give correct information is not suppression of facts, unless it was deliberate to stop the payment of duty. Since the facts were known to both the parties and the appellant acted promptly in paying the excise duty, the show cause notice could have been issued within the normal period as per Section 11A(1) of the Act. Accordingly, the demand raised in the show cause notice was set aside on the ground of limitation – The demand is set aside on ground of time-barred and consequently, the penalty is also set aside – The appeal is allowed - Whether the penalty imposed under Section 11AC(1)(c) read with Rule 25 of the Central Excise Rules, 2002 is sustainable – HELD - The penalty of equivalent amount imposed under Section 11AC(1)(c) read with Rule 25 of the Central Excise Rules, 2002 is unsustainable as the extended period of limitation cannot be invoked. The Tribunal noted that the appellant had taken the registration with the central excise authorities but did not file the returns for the period 01.03.2016 to 30.06.2017 nor charged the excise duty from their customers during the period 01.03.2016 to December 2016. However, the said violation cannot be attributed with intent to evade payment of duty and therefore the penalty imposed is not sustainable - Whether the demand of duty on the exported goods is sustainable – HELD - the demand of duty on the exported goods is not sustainable as the goods have been physically exported under the supervision of the Proper Officer of Customs, and the appellant has produced the relevant documentary evidence such as invoices and shipping bills. The appellant has not fulfilled the procedural requirements like furnishing the Bond and the Letter of Undertaking (LUT) before the Customs or Central Excise authorities. However, the Tribunal observed that a substantive right cannot be denied for want of procedural formalities. Accordingly, the demand of duty on the exported goods was set aside
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