Case Note & Summary
The case involved appeals against judgments of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) concerning the demand of central excise duty on PSC girders manufactured by the appellant for the Konkan Railways. The period in question spanned from June 1994 to February 1995, during which the girders were cleared without payment of duty. A show cause notice was issued on 8.5.1996, demanding a duty of Rs.53,91,498/- and imposing penalties. The appellant contended that the notice was barred by limitation, as it was issued beyond the six-month statutory period, and argued that the girders were not marketable, thus excise duty should not apply. The CESTAT upheld the extended limitation period, leading to the appeals. The Supreme Court analyzed the applicability of Section 11-A of the Central Excise Act, 1944, noting that the extended period of limitation was not applicable as the department was aware of the manufacturing activities. The court emphasized that the original notice did not allege suppression of facts, and thus the subsequent invocation of the extended period was impermissible. Consequently, the court set aside the CESTAT's order and allowed the appeal, rendering the issue of marketability moot. The court also dismissed related appeals on the grounds of limitation, affirming the decision in Civil Appeal No. 5305 of 2005.
Headnote
A) Central Excise Law - Limitation Period - Applicability of Extended Limitation - Central Excise Act, 1944, Section 11-A - The court held that the extended period of limitation could not be invoked as the facts alleged to have been suppressed were known to the department, and the original notice did not allege suppression. Therefore, the show cause notice issued beyond the statutory period was invalid, and the appeal was allowed (Paras 12).
Issue of Consideration
Whether the show cause notice was barred by limitation and if the extended period of limitation under Section 11-A of the Central Excise Act, 1944 was applicable.
Final Decision
The Supreme Court set aside the CESTAT's order, allowing the appeal on the grounds that the extended period of limitation under Section 11-A was not applicable. The court dismissed related appeals on the grounds of limitation.
Law Points
- Limitation period
- Central Excise Duty
- Marketability
- Show cause notice
- Section 11-A of the Act
