The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the wrong claim of excise exemption notification not ground for invoking the extended period of limitation.
The appellant, M/s. Omega Biotech Ltd, is engaged in manufacturing of pharmaceutical products and was availing area based exemption from payment of central excise duty under Notification No. 49/2003 dated 10.06.2003 till 14.01.2015. On 14.01.2015, the appellant had applied for Central Excise Registration but was paying Central Excise Duty at the rate of 2% in view of Notification No. 01/2011- CE dated 01.03.2011 as amended by Notification No. 16/2012-CE.
The department observed that the appellant was granted license dated 15.12.2004 renewed up to 14.12.2019 but for manufacture of drugs specified in Schedule C, C(1) and X excluding those of Schedule X to Drugs and Cosmetics Rules, 1945. Notification No. 01/2011-CE however exempts the excisable goods of the description specified in column (3) of the table of said notification from so much of duty of excise leviable thereon as in excess of the amount calculated at the rate of 2% ad valorem subject to such conditions as mentioned in the said notification, the appellant was found claiming benefit of Entry No. 37 of Notification 01/2011-CE.
The counsel for the appellant submitted that the show cause notice dated 03.05.2019 has been issued by invoking the extended period of limitation despite that there is no suppression of any fact with mala fide intention on the part of the appellant. As everything was duly informed to the department even in the quarterly ER-8 Returns, the appellant clearly mentioned about availment of exemption under the said notification. The department had full knowledge of the claim, hence the extended period should not have been invoked. The demand is liable to be set aside on this ground of limitation.
A Two-Member Bench of the Tribunal comprising Dr Rachna Gupta, Judicial Member observed that “The appellant had claimed the benefit of an exemption notification in its self-assessment which it was not entitled to. It has been the assertion of the appellant from the time of self-assessment up to and including in this appeal before us that it was entitled to the benefit this exemption notification. Wrong claim of an exemption notification is not a ground provided under section 11A for invoking extended period of limitation.”
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