Commissioner of Central Excise vs Phenoweld Polymers Pvt. Ltd.

S.C. Dharmadhikari, J.

This appeal of the Revenue challenges the order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Regional Bench at Mumbai dated 8th June, 2005. The appeal has been admitted on three substantial questions of law which read as under :

"1. Whether in view of express provision provided in Section 11A extended period of limitation is invocable only for the larger period beyond limitation and not otherwise ?

Whether the Hon''ble CESTAT was justified in holding that the extended period of limitation cannot be invoked in subsequent proceedings when no suppression has been alleged in previous show cause notices without considering that the show cause notice issued alleging suppression is for period for Nov. 1992 to Jan. 1996 whereas the show cause notices issued earlier were for the period Feb. 1996 and onwards ?

Whether the Hon''ble Tribunal was justified in relying on the judgment of the Supreme Court in the case of ECE Industries Limited Vs. Commissioner of Central Excise, New Delhi, (2004) 164 ELT 236 which is distinguishable to the facts of the present case ?"

The Revenue issued a show cause-cum-demand notice to the respondent-assessee demanding Excise duty interest and imposing penalty. An Order-in-Original was passed on 5th February, 1999 by the Commissioner of Central Excise, Mumbai-V. The Revenue alleged that the respondent is holder of Central Excise registration. It is engaged in the manufacture of plastic flushing cistern and parts thereof falling under Chapters 39 and 84 of the Schedule to the Central Excise Tariff Act. A show cause notice was issued on 19th November, 1997, calling upon the assessee to show cause why the duty demanded with interest penalty thereon for the period November, 1992 to January, 1996 under proviso to Section 11A should not be recovered.

The contention essentially before us is that though suppression was noticed by the Revenue, the three show cause notices dated 11th September, 1996 for the period February, 1996, show cause notice dated 4th October, 1996 for the period March, 1996 to July, 1996 and show cause notice dated 3rd March, 1997 for the period August, 1996 to September, 1996 did not allege suppression and, therefore, the larger period was not invoked. In the subject show cause notice dated 19th November, 1997, which covered the period November, 1992 to January, 1996, the extended period of limitation was invoked. A reply thereto was filed, inter alia, raising the issue of jurisdiction. This show cause notice was adjudicated and the above Order-in-Original came to be passed.

Aggrieved thereby, the assessee approached CESTAT which set aside the Order-in-Original.

We have heard both sides and perused the paper-books together with the impugned order. We do not find that the Tribunal was really called upon to decide any larger issue. Once the issue of invocation of extended period of limitation raises a mixed question of fact and law, then the Tribunal found and on facts that assuming the larger period could have been invoked the Revenue/Department was aware that the assessee sold the goods from the depot piece meal. Once the Revenue was so aware and as found by the Tribunal on facts, then, the extended period could not have been invoked and applied. Any larger controversy and wider question was really not arising in the given facts and circumstances. We also keep that open and particularly as to whether a subsequent show cause notice invoking larger period of limitation can be issued when on the same set of facts and allegations earlier show cause notice was issued. In other words, by alleging suppression can the larger period be invoked and for that purpose a fresh show cause notice can be issued or not is a question which we keep open for decision in an appropriate case. We find that on facts the Tribunal was justified in interfering with the Order-in-Original.

In the circumstances, by keeping open the larger issues, we answer the questions of law and essentially one pertaining to invocation of the larger period for November, 1992 to January, 1996. It is answered in favour of the assessee and against the Revenue. The appeal is thus dismissed. There shall be no order as to costs.