The Show cause notice issued for change in excise classification of goods was barred by limitation, as it was intimated – SC dismissed appeal of the Department
ABCAUS Case Law Citation:
ABCAUS 2853 (2019) (04) SC
The appellant had changed the goods classification under Central Excise Tariff Act, 1985. On the basis of said change in classification, investigation was conducted and thereafter a show cause notice was issued to classify the product under old headings of the Tariff Act by invoking extended period of limitation.
The matter was adjudicated and by invoking the extended period of limitation, the demand was confirmed along with interest and penalty was imposed on the appellant.
Against the said order, the appellant approached the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)
The CESTAT observed that the appellant had written a letter to the department for change of their classification and also filed ER-1 return accordingly.
The CESTAT held that as the fact of change in classification was in the knowledge of the department, therefore, the show cause notice issued to the appellant was barred by limitation.
Accordingly, CESTAT held that for the period within limitation the appellant was liable to pay duty along with interest. As the action of the appellant was in the knowledge of the department itself, therefore, no penalty was imposable on the appellant.
It was further held that as the appellant was liable to pay duty and had not availed Cenvat credit on input and input services, for the period for which demand had been confirmed, the appellant was entitled to avail Cenvat credit on input and input services.
Against the abobe order passed by the CESTAT, the excise department had filed an appeal to the Hon’ble Supreme Court.
The Hon’ble Supreme Court declined to interfere with the impugned order passed by the CESTAT and dismissed the appeal