CENTRAL EXCISE ACT, 1944

Section 11A

Recoveries of duties - Inocation of extended period of limitation - Allegation that Steel Bars were supplied to their sister concerns for the construction work and not for further manufacture of excisable goods -

Revenue filed appeal against order of Tribunal, wherein on issue of extended period of limitation under section 11A, Tribunal held in favour of the assessee saying that assessee could not be attributed with any suppression of relevant facts in regard to the valuation under rule 8 of the Central Excise (Valuation) Rules, 2000. Issue was in respect of Steel Bars, Rods, etc. transferred by assessee to its sister concerns during the period in question. Held: The extended period of limitation in instant case was not available to the Revenue Authorities and therefore, the SCN issued to the assessee on 19-8-2010 could not cover the period in question, viz., 2007-2008 to 2009-2010 except to the extent of one year from the date of issuance of SCN on 19-8-2010. Therefore, Tribunal was justified in holding in favour of the assessee to that extent. It was not clear as to when assessee had changed its method of valuation on the advice of revenue's authority himself based on some audit objection, then why table was turned on assessee. Adjudicating Authority, could not invoke the extended period of limitation and hold that the assessee was guilty of suppression of relevant facts viz., the Steel Bars were supplied to their sister concerns for the construction work and not for further manufacture of excisable goods, and thereby impose the duty following Rule 4 Valuation and not Rule 8 Valuation as advised by the department's authority itself. This was so, because assessee had followed the said advice/suggestion of the department and changed its valuation method from rule 4 to rule 8 (110%) of the cost of transfer of goods.