2026-VIL-264-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Limitation period for show-cause - Appellant transferred certain vehicle parts from its Ahmednagar plant to its Koregaon and Pithampur plants on a stock transfer basis and paid duty - Department determined the value of the excisable goods based on the comparable price at which the same goods were sold to independent buyers, which was higher than the price at which the goods were stock-transferred. The department confirmed the differential duty liability on the appellant - Whether the show-cause proceedings initiated by the department were barred by the limitation of time – HELD - The show-cause notice was issued based on the price lists submitted by the appellant, and therefore, the proceedings should have been confined to the normal period of one year as per the provisions of Section 11A of the Central Excise Act, 1944. The extended period of limitation was invoked without any element of suppression, misstatement, or fraud with an intent to evade payment of central excise duty. The initiation of the show-cause proceedings within the normal period is the rule, which should be strictly adhered to – Further, there were judgments by different judicial forums holding that the stock transfer to the appellant's own units and the sale of goods to independent buyers involve two separate classes of buyers, and therefore, the sell value to the independent buyers cannot be automatically adopted for confirming the demand on the goods stock-transferred to the appellant's other units - The impugned order is set aside and appeal is allowed in favour of the appellants on the ground of limitation
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