Legal principle

In revenue matters, the principle of consistency requires that the Revenue must not take inconsistent stands in similarly circumstanced cases. Extended limitation under Section 11A of the Central Excise Act, 1944 (analogous to Section 28 of the Customs Act, 1962) can be invoked only if the show-cause notice contains specific, explicit averments of fraud, collusion, or wilful suppression of facts with intent to evade duty, and such allegations are proved. In the absence of such proof, the normal limitation period applies. The appointed date of a scheme of amalgamation is the relevant date for computing limitation. An appeal under Section 35G of the Excise Act lies to the High Court only on substantial questions of law, not on findings of fact.

Court decision

The High Court dismissed the Revenue's appeal, holding that the CESTAT had rightly found the demand barred by limitation. The Court applied the principle of consistency, noting the Revenue accepted a similar outcome for M/s SAB Miller and cannot challenge it for the Respondent. The Court held that the extended limitation period could not be invoked in the absence of specific allegations and proof of fraud, collusion, or wilful suppression of facts as required under Section 28 of the Customs Act / Section 11A of the Excise Act (analogous provisions). The appointed date of amalgamation (01.04.2010) is the relevant date, and the demand notice issued on 19.12.2012 was time-barred. The appeal does not involve a substantial question of law.

Facts

The Respondent (M/s Millennium Beer Industries Ltd.), under an agreement dated 01.04.2005 with M/s United Breweries Ltd. (UBL), manufactured and sold alcoholic beverages to UBL customers as per UBL instructions during the period 23.09.2009 to 15.11.2011. The Appellant (Commissioner of Central Excise, now GST) issued a show-cause notice cum demand notice dated 19.12.2012 for Rs. 21,92,03,724/- with interest under Section 75 of the Finance Act, 1994 read with Sections 76, 77, and 78, invoking extended limitation. Vide Order-In-Original dated 30.04.2014, the demand and penalty were confirmed. The Respondent appealed to the Appellate Tribunal (CESTAT), which allowed the appeal holding the demand barred by limitation. The scheme of amalgamation provided for an appointed date of 01.04.2010, while the ROC certificate was issued on 16.11.2011. A similarly circumstanced assessee (M/s SAB Miller Breweries Pvt. Ltd.) also received an identical demand notice; CESTAT allowed that appeal as well, and the Revenue accepted that outcome but challenged the Respondent's appeal.

Key provisions

• Section 11A, Customs Act, 1962 — Definitions
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded