The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the extended period of limitation cannot be invoked as the facts regarding the clearance of goods etc. were known to the Department as well as to the Audit Officers well in advance.
The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that if the show-cause proceedings are barred by limitation of time, the merits of the case cannot be looked into for deciding the matter, ignoring the limitation aspect provided in the statute.
The applicant has contended that the Tribunal in the order has recorded the findings that the extended period of limitation cannot be invoked inasmuch as the facts regarding the clearance of goods etc. were known to the Department as well as to the Audit Officers well in advance.
Thus, it is contended that remanding the matter by the Tribunal back to the original authority for re-determination of the amount of Central Excise duty payable is not proper and justified. Therefore, it was contended that there is an apparent mistake in the final order in remanding the matter back to the original authority.
The period involved in the appeal is from 01.04.2013 to 14.05.2015 and the Show Cause Notice was issued by the Department on 28.11.2017, proposing for recovery of the Central Excise duty demand from the appellant, by invoking the extended period of limitation.
Since the entire modus operandi of manufacturing and clearance of the goods were known to the Department well in advance through filing of periodical returns by the appellant and on the basis of the books of accounts maintained by them, periodical audit being conducted by the Department, we are of the view that the charges levelled against the appellant such as suppression, fraud, collusion, wilful mis-statement etc. cannot be sustained and in such circumstances, the duty demand can only be sustained for the normal period of limitation of two years.
The tribunal held that since the present SCN was issued on 28.11.2017 i.e. beyond the normal period prescribed under Section 11A of the Central Excise Act, 1944, confirmation of the adjudged demands in the impugned order, by invoking the extended period of limitation cannot be sustained against the appellant.
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Case Details
Case Title: Franke Faber India Private Limited Versus Commissioner of CGST & Central Excise Aurangabad Commissionerate
Case No.: Excise Appeal No. 85030 Of 2019
Date: 09.01.2025
Counsel For Appellant: Jitin Singhal
Counsel For Respondent: Xavier P Mascarenhas
