Extended limitation Period doesn’t apply to De-bonding Post Central Excise Verification: CESTAT [Read Order]

The two member bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad, observed that the larger limitation Period doesn’t apply to de-bonding post central excise Verification

The issue to be decided was whether the Notice was barred by time and the larger period of limitation apply since the goods were cleared after verification of duty payment and issue of No dues certificate by the central excise officer.

Briefly the facts of the case are that Appellant, Contacare Ophthalmics and Diagnostics, were functioning as 100% EOU .The Appellant, Hasmukh I.  Patel, was an employee and Authorized signatory of the100% EOU.

The factory premised of the 100% EOU were visited by the Central Excise officers for verification of the stock of raw materials, capital goods and finished goods available at the time of De-bonding and calculation of the duty payable thereon was also verified by the department and intimated to the Assistant Commissioner of Central Excise, by letter dated 22-5-2012 of the Superintendent of Central Excise.

Mr. J.C. Patel, counsel with Shri Rahul Gajera, Advocate appearing on behalf of Appellant, submitted that the calculation of the Duty done by the Principal Commissioner was Basic customs duty has been wrongly calculated on the MRP which is contrary to Proviso to Section 3(1) of the Central Excise Act 1944, which requires the basic customs duty to be calculated on value as per the Customs Act 1962, CVD has been wrongly calculated on the MRP instead of MRP less abatement,

The tribunal observed that the Principal Commissioner had wrongly calculated the Basic customs duty on the MRP of the goods, which is contrary to the provisions of Proviso to Section 3 (1) of the Central Excise Tariff Act. As per Proviso to said Section 3 (1), Excise duty on goods manufactured by a 100% EOU and brought to any place in India shall be an amount equal to aggregate of customs duties leviable on like goods when imported into India and the value of such goods shall be as per the Customs Act 1962 and the Customs Tariff Act 1975.

Virgo Valves & Controls P. Ltd v CCE, CESTAT Mumbai – In this judgment the coram of Ramesh Nair ( Judicial member ) and Raju ( Technical member ) held that where De-bonding was done after verification by Central Excise and issuance of No dues certificate, the larger period of limitation cannot apply.

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