WATER RESOURCES DEVELOPMENT Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal under Section 35G of the Central Excise Act, 1944 (for short, "the said Act") was admitted on 9.3.2017 on the following substantial question of law : "Whether the Customs, Excise and Service Tax Appellate Tribunal was justified in law and in facts to hold that the demand under the show cause notice was not barred by law of limitation ?"

(2.) The facts relevant for answering the aforesaid substantial question of law are that it is the case of the appellant that it is engaged in the manufacture of mechanical gates, parts and hoists that are required to be installed on dam constructed by the Government of Maharashtra. The work of construction of dams was undertaken by the Irrigation Department and as a part of that, the gates and hoists manufactured were supplied to the said Department. These goods were exempt from payment of excise duty in view of the exemption Notification No.74/1993 dated 28.2.1993. On 1.4.1996 Maharashtra Act No. XV of 1996 was enacted and the Vidarbha Irrigation Development Corporation was formed under that Act. According to the Revenue, the appellant lost benefit of exemption under Notification No.74/1993. With regard to the goods cleared for the period commencing from 1997- 1998 to 2000-2001 a show cause notice was issued by the Office of the Directorate General of Central Excise Intelligence calling upon the appellant to show cause why central excise duty of Rs.29,17,879/- should not be demanded under Section 11A(1) of the said Act. Interest under Section 11AB as well as penalty under Section 11AC of the said Act was also sought to be imposed. This show cause notice was served on the appellant on 8.5.2001.

(3.) Reply was given by the appellant to the aforesaid show cause notice on 15.1.2002 in which it was stated that the appellant was a State Government Department and there was no transaction entered concerning payment of excise duty. There was no intention to evade payment of central excise duty. On this count, it was stated that the show cause notice be dropped. An order dated 25.3.2003 came to be passed by the Commissioner in which the show cause notice was confirmed and the amounts mentioned in the said notice were held to be recoverable from the appellant.