The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the demand notice issued after 9.5 years exceeding the time limit of 5 years is time-barred relieving TATA steel from excise duty.
TATA Steel Ltd (appellant) engaged in the production of Chrome concentrate which was produced at the Sukinda Plant in the State of Odisha. In the said Plant, the Chrome ore was upgraded to High-Grade Chrome concentrate which is a value-added commodity.
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The appellant transported chrome concentrate from the factory to the port amounting to 1,02,586.620 MT from 15.04.2006 to 13.06.2006. Therefore, the revenue sought duty of Rs. 8,30,32,485 for the said period by way of letter. The appellant replied that there was transit loss at storage taken for a long period and some amount of weight was also lost to the chrome concentrate.
The appellant approached the Commissioner of Customs. The commissioner agreed that there was a transit loss of 2.5 percent but the case remained pending for a long time. The appellant approached the High Court of Odisha praying that they were not required to pay duty due to transit loss. The notice of demand was set aside by the High Court of Odisha.
In Review, the High Court of Odisha directed the revenue to recover the duty by proper process within 4 months of the High Court Order on 25.10.2011. Therefore, a show cause notice was issued on 05.01.2016 demanding duty from the appellant. The department confirmed the demand of Rs. 8,30,32,485. Aggrieved by the order, the appellant approached the tribunal.
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The two-member bench comprising Ashok Jindal (Judicial Member) and Rajeev Tandon (Technical Member) observed that the High Court of Odisha directed the revenue to complete proceedings within 4 months.
The tribunal observed that no proceedings were initiated within the said time. The tribunal further observed that the maximum time limit to issue notice is 5 years if there was any evasion of duty by the way of suppression of facts and in the present case the notice was issued after 9.5 years.
Therefore, the tribunal held that the demand against the appellant was barred by limitation and demands were not sustainable in the eyes of the law. The appeal was allowed
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