Time Barred SCN Beyond Statutory One-Year Period: CESTAT allows Cum-Duty Benefit and sets aside Time-Barred Excise Demand [Read Order]
The assessee also argued that the benefit of cum-duty valuation under Section 4(1) of the Act should have been granted.
Excise - duty - demand - taxscan
Excise - duty - demand - taxscan
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore Regional Bench, has ruled that one of the two excise duty demands was time-barred and that the assessee is entitled to cum-duty benefit on the other.
The appeals arose from two orders passed by the Commissioner of Central Excise (Appeals-I), Bangalore, confirming demands of ₹4,54,082 and ₹3,15,109 for different periods between May 2010 and May 2011. Poorna Graphics, engaged in offset printing and manufacture of printed paper tags under Chapter Heading 4821 10 10, had paid excise duty at 4% but failed to adopt the increased rate of 8% introduced through Notification No. 17/2009-CE dated 7 July 2009.
Represented by Advocate M.A. Narayana, the appellant contended that the show cause notice (SCN) for May 2010 was time-barred under Section 11A of the Central Excise Act, 1944, as it was received on 10 June 2011, beyond the statutory one-year period from the date of filing of ER-1 returns. The assessee also argued that the benefit of cum-duty valuation under Section 4(1) of the Act should have been granted, relying on the Larger Bench ruling in a very early on case in Shri Chakra Tyres Ltd. v. CCE, Madras [1999].
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The Revenue, represented by Superintendent (AR) Neeraj Kumar, maintained that the appellant had admitted short payment of duty and that the benefit of cum-duty was inapplicable as the assessee had not declared the same during the relevant period.
The two-member Bench comprising Mr. P.A. Augustian (Judicial Member) and Mr. Pullela Nageswara Rao (Technical Member) observed that the assessee’s omission to pay the enhanced rate of duty was an admitted fact. However, since the department issued the SCN after the limitation period, the demand for May 2010 was held to be time-barred.
However, in respect of the second period, the Tribunal held that Poorna Graphics was liable to pay the duty but was entitled to the benefit of cum-duty price as per the Shri Chakra Tyres Ltd. decision.
The Bench cited the Tribunal’s finding that the total consideration received by the assessee must be treated as cum-duty price when differential duty demands arise and cannot be retrospectively adjusted based on hypothetical sale price changes.
The Tribunal allowed both appeals with consequential relief, setting aside the time-barred demand and directing that cum-duty benefit be extended for the remaining period.
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