Satish Kumar Mittal, J. - (1.) THIS appeal filed by the revenue under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as 'the Act') has been directed against the order dated 18.6.2007, passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as 'the CESTAT'), whereby E/Appeal No. 178/95 filed by the respondent -assessee, has been allowed and the order dated 24.11.2004, passed by the Collector of Central Excise, New Delhi (hereinafter referred to as 'the Collector'), has been set aside.
(2.) IN this appeal, the following substantial question of law has been raised by learned Counsel for the appellant for consideration of this Court: Whether in the instant case duty can be demanded from the party under the proviso to Section 11A(1) of the Central Excise and Salt Act, 1944, by invoking extended period of limitation of five years, when a show cause notice has been issued to the party for the normal period, before the issue of the show cause notice invoking extended period as provided under the Section quoted supra, when relevant data were not being supplied by the party inspite of best of efforts of the department and apparent non cooperation on the part of the party, with the sole intent of suppression of facts? The relevant facts of the case are that the assessee (M/s Escorts Limited (TED), Faridabad) was engaged in manufacture of Tractor parts falling under Tariff heading 8708.00 of the Schedule to Central Excise. Tariff Act, 1985. The unit has been manufacturing and clearing tractor parts on the basis of price lists supported by costing certificate duly certified by a Chartered Accountant, which were to be transferred to its sister division for captive use in the manufacture of tractors. Subsequently, on scrutiny, it was revealed that all the parts transferred by the assessee to its sister division were not being used captively, as some of the parts were being sold in open market as spare parts. Therefore, on 29.4.1993, a show cause notice dated 29.4.1993 was issued proposing demand of duty for the period from 1.10.1992 to 11.3.1993, while asserting that assessable value of the goods issued by the tractor division should have been at the same rate on which the goods were sold in open market through the spare parts in terms of Rule 6(b)(i) of the Central Excise Valuation Rules, 1975. The said demand was confirmed by the adjudicating authority and was also upheld by the Commissioner vide final order dated 5.10.1993.
(3.) AFTER one year of the said show cause notice, another show cause notice dated 1.6.1994 demanding duty on the same ground for the period from 1.5.1989 to 30.9.1992 was issued, which is the subject matter of dispute in the present appeal. Though the said notice as barred by limitation, but the venue claimed the said notice to be within limitation by invoking the extended period of limitation under Section 11A of the Act, on the ground that the assessee has willfully suppressed and misstated the facts while not paying the duty on the price on which part of the goods were sold in open market by the sister concerns. The said show cause notice was adjudicated by the Collector vide Order in -Original dated 24.11.1994 and demand of Rs. 9,95,85,316.41 was confirmed on the assessee under the proviso to Section 11A(1) of the Act and a penalty of Rs. 25,00,000/ -was imposed under Section 173Q of the Central Excise Rules, 1944.;