Custom, Excise & Service Tax Tribunal
Anjaleem Enterprises P Limited vs Ahmedabad-Ii on 10 March, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
REGIONAL BENCH - COURT NO. 03
Excise Appeal No. 11027 of 2021
[Arising out of OIA-AHM-EXCUS-003-APP-30-31-2021-22 dated 22/09/2021 passedby
Commissioner of Central Excise, Customs and Service Tax-AHMEDABAD-II]
ANJALEEM ENTERPRISES P LIMITED .....Appellant
C/O Madhukumar A Mehta,
13 A Vedant Villas Off 30 Meter Gotri Road,
Near Pratham Vatika Gptro
Vadpdara, Gujarat
VERSUS
C.C.E.-AHMEDABAD-II .....Respondent
Custom House... First Floor, Old High Court Road, Navrangpura, Ahmedabad,Gujarat-380009 WITH Excise Appeal No. 10010 of 2022 [Arising out of OIA-AHM-EXCUS-003-APP-30-31-2021-22 dated 22/09/2021 passedby Commissioner of Central Excise, Customs and Service Tax-AHMEDABAD-II] MADHUKUMAR A MEHTA .....Appellant 13 A Vedant Villas Off 30 Meter Gotri Road, Near Pratham Vatika Gptro, Vadodara,Gujarat VERSUS C.C.E.-AHMEDABAD-II .....Respondent Custom House... First Floor, Old High Court Road, Navrangpura, Ahmedabad, Gujarat-380009 APPEARANCE:
Shri. Rahul Gajera, Ms. Shamita Patel, Shri J.C Patel, Advocates for the Appellant Shri. G.Kirupanandan, Superintendent (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR FINAL ORDER NO.A /10236-10237 /2022 DATE OF HEARING: 01.03.2022 DATE OF DECISION: 10.03.2022 RAMESH NAIR The brief facts of the case are that the appellant M/S Anjaleem Enterprises Pvt. Ltd. during the period from June 1990 to 1991 has manufactured "Subscriber Call Recorder and Controller Attachment"
(popularly called STD-PCO) at its factory located at Gandhinagar. The
2|Page E/11027/2021&E/10010/2022 appellant Mr. MadhuKumar A. Mehta is Managing Director of Anjaleem Enterprises Pvt. Ltd. The software for the said STD-PCO was developed and recorded by the appellant on Medium/Memory Chips or EPROMs (Erasable, Programmable Read only Memory). The unrecorded medium (EPROM) was purchased by the appellant and the program for the STD-PCO was recorded thereof. The STD-PCO was classifiable under CETH No. 8517.00 which covered Electrical Apparatus for line telephony. As regards the EPROMs, the appellant had bona fide belief that since the same was Recorded Media (i.e. media recorded with software), the same was correctly classifiable that recorded media under CETH 8524.90 and was exempted from Central Excise duty under Notification No. 84/1989- CE dated 01.03.1989 which granted exemption to computer software of heading 85.24 from the whole of the Central Excise duty. The Appellants holding a bona fide belief that although the EPROMs were being cleared from STD-PCO duly fitted in the STD-PCO, they were separately classifiable under CETH 8524.90 and were exempted from Central Excise duty. Accordingly, in the classification list the appellant classified STD-PCO under CETH 8517.00 and EPROMs was separately classified under 8524.90 and claimed exemption from Central Excise duty in respect thereof under Notification No. 84/1989-CE. The appellant did not include the value of EPROMs in the value of STD-PCO. Hence, not paid the Central Excise duty on the EPROMs Show Cause Notice dated 16.03.1993 was issued contending that the EPROMs were not classifiable separately from the STD-PCO and that their value was liable to be included in the value of STD-PCO and on that basis Show Cause Notice proposed to demand duty of Rs. 7,42,900/- by invoking larger period of limitation. There were also demands of Rs. 2,505/- on one STD-PCO found short (which was stolen and for which police complaint was filed) and Rs. 43,436.81/- on removal of inputs as such on which they have admittedly paid up before the issuance of show cause notice. The notice also proposed imposition of penalty on the Appellants. In an identical matter of the very same Appellants in respect of
3|Page E/11027/2021&E/10010/2022 their other factory at Vadodara, similarly proceeding was carried out. At Tribunal stage, it was held against the appellant in that case, which was reported at ANJALEEM ENTERPRISES PVT. LTD.VS. CCE 2001(137) ELT 1190. The said decision of the Tribunal was upheld by Hon'ble Supreme Court has reported in ANJALEEM ENTERPRISES PVT. LTD. VS. CCE-2006 (194) ELT 129(SC). The Adjudication Authority after considering the Appellant's reply passed order dated 28.11.2008, whereby confirmed the charges made in the Show Cause Notice and also confirmed the demand and imposed penalty, personal penalty was also imposed on Mr. Madhukumar A. Mehta under Rule 209-A. Being aggrieved by the Order in Appeal the appellant filed the present appeal. The appellant in the present appeal only raise the ground of limitation as the merit had already been decided against them by Hon'ble Supreme Court.
2. Shri Rahul Gajera, Ms. Shamita Patel, Shri J.C Patel appeared for the appellant. Ms. Shamita Patel submits that the appellant is not contesting the matter on merit as the same has been settled by the Hon'ble Supreme Court. However, the appellant has contesting the case on limitation. She submits that in the earlier proceeding of their other Unit Vadodara, the Tribunal while deciding the matter on merit against the appellant held that the demand for the longer period is hit by limitation as there is no mala fide on the part of the appellant. She submits that identical facts are involved in that case as well as in the present case as regard issue on limitation. She submits that the appellant had filed classification list and claimed the exemption Notification as per their bona fide belief. Therefore, there is no suppression of fact with intention to payment of Central Excise duty. Hence, the entire demand being covered under larger period is not sustainable. She submits that the Learned Commissioner (Appeals) rejected the submission on limitation on the ground that the appellant are taking the issue of limitation first time before the Commissioner (Appeals). Therefore, the same cannot be entertained. In this regard she submits that the limitation being
4|Page E/11027/2021&E/10010/2022 mixed question of facts and law can be raised at any stage. In support of her submission, she further submits that in the present case the issue involved is the classification and involved interpretation of law. For this reason also neither larger period is invocable nor is the penalty imposable. In support of her submission, she placed reliance on the following judgments:
Anjaleem Enterprises P. Ltd v CCE-2001 (137) ELT 1190 Anjaleem Enterprises P. Ltd v CCE-2006 (194) ELT 129 (SC) Anjaleem Enterprises P. Ltd v CCE 2002 (140) E.L.T. 163 CCE v Harish Industries Engineers-2008 (223) ELT 651 Brakes India Ltd v CCE-1999 (111) ELT 38. Kusum Ingots & Alloys v CCE-2001 (137) ELT 550 National Organic Chemical Indus Ltd v CC-2000 (126) ELT 1072 Upheld in commissioner v National Organic Chemical Indus Ltd-2002 (142) ELT A280 (SC) Tata Oil Mills co v CCE-1996 (88) ELT 463 Sayani & Sons v. Commissioner - 2016 - TIOL- 198- CESTAT- MUM Ahmedabad Management Association v. Commissioner - 2015 (9) TMI 883 - CESTAT.
Gujarat Intelligence Security v CCE - 2010 (19) STR 270 CCE v Gujarat Intelligence Security - 2011 (24) STR 167 (GUJ). P & B Pharmaceuticals (P) Ltd v CCE - 2003 (153) ELT 14 (SC) Godrej Soaps V CCE - 2004 (174) ELT 25 (Tri-LB) Central India Polyster Ltd v CCE - 2004 (171) ELT 241
3. Shri G. Kirupanandan, Learned Superintendent (Authorized Representative) appearing on behalf of the revenue reiterates the findings in the impugned order and argue the matter on the basis of the written submission dated 28.02.2022 which consists of compilation of various judgments. He further submits that in the present case the appellant is only
5|Page E/11027/2021&E/10010/2022 raising the issue of limitation. The appellant has not taken this ground before the Adjudication Authority. Learned Commissioner (Appeals) has rightly rejected the submission on limitation as the limitation involves the factual metrics, which was neither placed before the Adjudicating Authority nor has been considered. Accordingly, the learned Commissioner (Appeals) has rightly held that since the appellant have raised this issue first time, cannot be considered.
4. I have carefully considered the submissions made by both the sides and perused the records. I find that the issue on merits on the classification of goods is no longer under dispute for the reason that in the appellant own case the Hon'ble Supreme Court in case reported at ANJALEEM ENTERPRISES PVT. LTD. VS. CCE-2006 (194) ELT 129(SC) decided the matter against the appellant. The limited issue to be decided in the present appeal is by that whether demand of duty raised in the Order In Original and upheld in the impugned order is time bar or otherwise. In this regard I find that the commissioner (Appeals) rejected the claim on time bar submitted by the appellant before him on the ground that the issue of time bar was raised first time before the Commissioner (Appeals). It is a settled law that issue of limitation can be raised at any stage, being a mixed question of law and facts. Therefore, the Commissioner (Appeals) order on limitation is incorrect and illegal. Now, I examine the issue on limitation from the facts of this case. I find that the appellant under bona fide belief have been claiming that STD-PCO and EPROMs are classifiable separately and EPROMs is under Exemption Notification No. 84/1989-CE dated 01.03.1989. The appellant have been filling the classification list wherein they have separately classified both the items and claim the exemption notification. Therefore, the entire facts were very much before the department. I find in the identical facts in the appellants own case though the matter was decided against them on merit by this tribunal in the case cited as ANJALEEM ENTERPRISES PVT. LTD. VS. CCE-2006 (194) ELT 129(SC) but the tribunal considering the similar
6|Page E/11027/2021&E/10010/2022 facts extended the benefit of time bar. The relevant para of the said judgment is reproduced below.
"24. The notice demanding duty resulting in the adjudication order impugned in the Appeal 1186/96 is dated 19-10-1993, demanding duty on the goods cleared between October, 1988 and April, 1993. Except for a month, the period for which duty is demanded is beyond six months from the relevant date (in this case on 5th of the following month that is the date on which monthly RT-12 returns showing clearing of these goods required were filed) as specified in the Explanation to Section 11A of the Act. The notice cites the extended period contained in the proviso to Section 11A of the Act on the ground of intention to evade duty on the STD/PCO machine by suppressing the real value of the product. Now, the classification list filed by the appellant for the years from 1988 claiming classification of the product under Heading 85.24 with the benefit of Notification 84/89 had been approved by the department. The Department was therefore fully aware that the appellant claimed classification of the goods differently from the main machine in which it was fitted. The relevant information required for assessment therefore had not been suppressed; nor could it be said in these circumstances that there was an intention to evade payment of duty. There can be no evasion since the goods were removed in pursuance of an approved classification list. The demand for this part of the period would therefore be barred by limitation. Further, by applying the ratio of the Supreme Court in CCE v. Cotspun Ltd.-1999 (113) E.L.T. 353 (S.C.) - 1999 (34) RLT 709 that where classification list has been approved, demand for duty based upon the
7|Page E/11027/2021&E/10010/2022 revision in the classification could only be made from the date of the proposed change in the classification, the demand for the period within six months also cannot be sustained."
As per above decision of the tribunal, the fact of the same is identical to the present case even on limitation also. Therefore, the entire demand which is beyond the normal period is not sustainable on time bar.
5. Accordingly, the impugned order is set aside, appeal is allowed with consequential relief on the ground of time bar only. Since, the duty demand itself is not sustained, the consequential penalty on Mr. MadhuKumar A. Mehta is also not sustained. Accordingly, the penalty is also set aside. As a result the impugned order is set aside. Appeals are allowed.
(Pronounced in the open Court on 10.03.2022) RAMESH NAIR MEMBER (JUDICIAL) Palak