The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand imposed on the manufacture of auto parts on the grounds of limitation.
NTF (India) Pvt. Ltd, the appellant assessee was engaged in the manufacture of auto parts falling under Chapter No. 8708.00 of the First Schedule to the Central Excise Tariff Act, 1985, and sold them to Maruti Udyog Ltd. (MUL) & others.
The assessee appealed against the order passed by the Commissioner (Appeals) to confirm the demand of interest on differential duty paid by the assessee.
Rakshit Verma, the counsel for the assessee contended that the Commissioner (Appeals) had not given any opportunity to hearing to the assessee and the assessee had also not received any notice regarding the date of the hearing.
Also submitted that the allegation of the department regarding willful suppression of facts for invoking the extended period of limitation does not survive in the present case.
Harish Kapoor, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was liable to pay the demand of interest of differential duty raised by the department and the demand was as per the law and liable to be sustained.
The Bench observed that in the case of Neel Metal Products Ltd. Vs. Commissioner of Central Excise, the court held that interest cannot be demanded beyond the normal period of limitation of one year in the absence of fraud/collusion, etc.
The two-member bench comprising S S Garg (Judicial) and Anjani Kumar (Technical) held that invoking the extending period of limitation was not sustainable and the demand of interest by invoking the extended period of limitation was not justified and the demand was liable to be quashed.
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