2026-VIL-753-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Extended period of limitation under Central Excise Act - The appellant had maintained proper records and filed them with the department, but the department did not scrutinize them – HELD - The extended period of limitation under section 11A(4) of the Central Excise Act could not have been invoked as the appellant had maintained proper records and filed them with the department, and the department did not scrutinize them. The Supreme Court has held that when the department has full knowledge about the manufacture of goods, the extended period of limitation cannot be invoked. Mere failure to declare does not amount to wilful suppression, and there must be a positive act from the assessee's side to find wilful suppression. In the present case, the department was aware in 2015 that the appellant had taken over the unit, but the show cause notice was issued only in 2020, after an inordinate delay. Therefore, the extended period of limitation could not have been invoked - The impugned order is set aside and the appeals are allowed - Relevance of statements recorded under section 14 of the Central Excise Act - The persons whose statements were recorded under section 14 were not examined as witnesses by the adjudicating authority as required under section 9D – HELD - The adjudicating authority could not have placed reliance on the statements recorded under section 14 of the Central Excise Act as the procedure contemplated under section 9D of the Act was not followed. Section 9D mandates that the persons whose statements were recorded under section 14 have to be examined as witnesses before the adjudicating authority, and the authority has to form an opinion that the statements should be admitted in evidence in the interests of justice. Failure to comply with this procedure would mean that no reliance can be placed on the statements recorded under section 14 - Imposition of penalty under rule 26 of the Central Excise Rules - There was no finding that the goods were liable to confiscation – HELD - The imposition of penalties under rule 26 of the Central Excise Rules on Jasraj Singh Kalra and Sarabjit Singh Kalra cannot be sustained as there was no finding in the impugned order that the goods were liable to confiscation. Rule 26 requires that the goods should be liable to confiscation for the penalty to be imposed, and in the absence of such a finding, the penalties under rule 26 could not have been imposed.
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GSTAT Appeal filed wrongly...
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