Commissioner Of GST And Central Excise, Surat vs. Chalthan Vibhag Khand Udyog Sahakari Mandali LTD.

Held

The Court held that no question of law arose from the CESTAT's order. The Tribunal had correctly appreciated the proviso to Section 11A(1) of the Central Excise Act, 1944. The Tribunal's finding that there was no suppression or misdeclaration on the part of the assessee was based on the evidence on record, including the relevant invoices, PLA, and RT-12 returns. The assessee had cleared ethyl alcohol after discharging 8% of its price and had declared ethyl alcohol as an exempted product. Consequently, the demand notice issued in 2000 for recovery of duty short-paid for the period December 1996 to June 1999 on molasses used in the manufacture of ethyl alcohol could not be sustained as it was barred by limitation. The CESTAT's order setting aside the impugned order and allowing the appeal with consequential relief was upheld.

Facts

The Commissioner of GST and Central Excise, Surat (the petitioner) filed a Tax Appeal against an order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The appeal concerned the recovery of unpaid excise duty on molasses used by the respondent, Chalthan Vibhag Khand Udyog Sahakari Mandali Ltd. (the assessee), for the period December 1996 to June 1999. The CESTAT had set aside the demand notice issued in 2000, holding that the demand was barred by limitation. The CESTAT found no suppression or misdeclaration by the assessee, noting that the assessee had discharged 8% of the price of denatured ethyl alcohol cleared from the factory and had declared ethyl alcohol as an exempted product in their Classification List.

Key Issues

1. Whether, in the circumstances, the Tribunal correctly appreciated the proviso to Section 11A(1) of the Central Excise Act, 1944, while holding that the demand for excise duty on molasses was barred by limitation? The petitioner (Department) argued that the extended period of limitation under Section 11A(1) of the Central Excise Act, 1944, was correctly invoked for the recovery of unpaid excise duty on molasses. The Department contended that there was suppression or misdeclaration on the part of the assessee, justifying the invocation of the extended period. The respondent (assessee) argued that there was no suppression or misdeclaration. They had paid 8% of the price of denatured ethyl alcohol cleared from the factory and had declared ethyl alcohol as an exempted product in their Classification List. Therefore, the demand for duty on molasses used captively was barred by the normal period of limitation.