Loyal Textile Mills Ltd vs Commissioner Of Central Excise

[Arising out of Order-in-Appeal No.87/2006-CE dated 15.6.2006 by the Commissioner of Central Excise (Appeals), Madurai ]

Loyal Textile Mills Ltd. Appellant

Versus

Commissioner of Central Excise, Tirunelveli Respondent

Appearance:

Shri M. Kannan, Advocate For the Appellant

Shri K.P. Muralidharan, AC (AR) For the Respondent

CORAM:

Honble Shri R. Periasami, Technical Member

Date of hearing/decision :17.4.2015

FINAL ORDER No.40425/2015

Consequent upon the Hon'ble High Court's order dt. 6.11.2013, the appeal is taken up. The Hon'ble High Court, Madras set aside the Tribunal's Final Order No.84/2009 dt. 16.1.2009 and remitted the case to the Tribunal with a direction to consider whether the show cause notice is hit by limitation and to consider communication dated 6.8.2004 issued by the department to decide on limitation issue. The relevant para of the Hon'ble High Court's order is reproduced as under :-

"9. In fact, this Court has scanned the entire order passed by the Appellate authority and no mention has been made with regard to the said communication dated 06.08.2004. Since no mention has been made in the order passed by the Appellate Authority with regard to communication dated 06.08.2004, this Court is of the view that simply by way of filing return, the Department has had knowledge about the transaction of the respondent. To put it in short, the communication dated 06.08.2004 is very much essential for the purpose of deciding as to whether the show cause notice dated 06.10.2005 is barred by limitation as per actual period of limitation mentioned in Section 11(A) of the said Act or the appellant is entitled to get extended period of limitation. Therefore, for the purpose of deciding the said aspect, the order passed by the Appellate Tribunal is liable to be set aside and the matter is liable to be remitted to the file of Appellate Tribunal."

2. Heard both sides.

3. As directed by the Hon'ble High Court, the limited issue involved in this appeal to consider letter dt. 6.8.2004 of the Range Superintendent. Ld. Advocate submitted copy of letter in OC No.517/2014 dt. 6.8.2004 issued by the Superintendent of Central Excise, Town Range, Kovilpatti wherein the Range Superintendent has enclosed copy of Audit Para 1/Part III and Para 2/Part-III signed by AC (Audit) dt. 7/2004. In the said letter dt 6.8.2004, the jurisidictional Range Superintendent has directed the appellant-assessee to pay the duty and interest as demanded in Audit Para. On perusal of the relevant audit para, the audit has raised objection on the clearance of capital goods on the ground that they have paid excise duty on the lesser value instead of working out correct depreciation value and accordingly demanded differential duty of Rs.65,043/-. From the above record, it is clearly evident that audit report was communicated by the jurisdictional Range Superintendent on 6.8.2004 only demanding differential duty of Rs.65,043/- whereas the show cause notice was issued on 6.10.2005. Therefore, it is clearly evident that there is no suppression of facts. The department was well aware of the facts on 6.8.2004 itself when the return was filed in April 2003. Even by taking into account letter dt. 6.8.2004, the demand should have been issued within one year whereas it is clearly established that demand is hit by limitation. It is evident from the records that capital goods have been imported on 9.8.95 under EPCG scheme and subsequently cleared to their sister unit on payment of duty. As clearly seen from audit para raised by the department, which was communicated by the jurisdictional Superintendent by demanding only differential duty on account of wrong calculation of depreciation value. There is no allegation of any contravention of provisions of rules. Accordingly, there is no suppression of facts or intention to evade payment of duty. The impugned order is set aside and the appeal is allowed.

(Dictated and pronounced in open court)

(R. PERIASAMI) TECHNICAL MEMBER

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