Extended Period of Limitation for Excise Duty Recovery: CESTAT Confirms Demand Within Normal Limitation Period [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal(CESTAT) confirmed demand within the normal limitation period in a matter  concerning the extended period of limitation for excise duty recovery.

Franke Faber India Private Limited,appellant-assessee,filed a miscellaneous application to correct a mistake in the tribunal's decision dated 28.10.2024. The appellant argued that the tribunal wrongly stated the extended period of limitation couldn't be applied, as the facts about the clearance of goods were known to the Department and Audit Officers in advance. The assessee contended that remanding the matter for re-determining the Central Excise duty was not justified.

Step by Step Guide of Preparing Company Balance Sheet and Profit & Loss Account Click Here

The two member bench comprising S.K.Mohanty(Judicial Member) and M.M Parthiban(Technical Member) reviewed the case records and the order dated 28.10.2024. In paragraph 9.2 of the order, the tribunal stated that the extended period of limitation couldn't be applied because the Department and Audit Officers were already aware of the goods clearance details.

Based on this, the appellate tribunal found a mistake in the original order and allowed the miscellaneous application, recalling the final order and restoring the appeal for a decision on the limitation issue.

Read More: Relief to India Cements: CESTAT Rules Demolition Activity Qualifies as Factory Repair Under Rule 2(l) of CCR

The bench noted that the period involved was from 01.04.2013 to 14.05.2015, and the Show Cause Notice (SCN) was issued on 28.11.2017, beyond the normal two-year limitation period. Since the Department had prior knowledge of the appellant’s activities through returns and audits, charges like suppression and fraud could not be justified. Therefore, the tribunal ruled that the demand could only be sustained within the normal limitation period.

Clear all Your Doubts on RCM, TCS, GTA, OIDAR, SEZ, ISD Etc... Click Here

Referring to a judgment by the  Allahabad High Court, the CESTAT emphasized that if the demand was time-barred, the merits of the case couldn’t be considered. The tribunal concluded that the extended period of limitation could not be applied, and the demand could not be confirmed.

In short,the appeal was allowed.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates