Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs Best Cotton Mills Ltd on 21 May, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/205/02
[Arising out of Order-in-Appeal No.07/2002 (CBE) (GVN) dated 4.1.2002 passed by the Commissioner of Customs & Central Excise (Appeals), Tiruchirapalli]
For approval and signature:
Honble Ms.JYOTI BALASUNDARAM, Vice-President
Honble Mr. P.KARTHIKEYAN, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Commissioner of Central Excise,
Coimbatore
Appellant/s
Versus
Best Cotton Mills Ltd.
Respondent/s
Appearance :
Shri R.P.Meena, SDR Shri S.Venkatachalam, Advocate For the Appellant/s For the Respondent/s CORAM:
Honble Ms.Jyoti Balasundaram, Vice-President Honble Mr. P. Karthikeyan, Member (Technical) Date of hearing : 21.5.2009 Date of decision : 21.5.2009 Final Order No.____________ Per Jyoti Balasundaram The respondents herein, who are engaged in the manufacture of cotton yarn, cleared their entire production during the period October 1996 to June 2000 on stock transfer basis to depot at Tiruppur and to their consignment agents for sales and for other disposal. The final sale of yarn was effected from the depot at Tiruppur. Cotton yarn was consumed for the manufacture of hosiery fabrics on their own account besides effecting sales to other customers. While effecting clearances to job workers, the respondents had not adopted the same value for the same kind of yarn and adopted much lesser value when compared to the value adopted for the sales made from depot to other customers. Hence a show-cause notice dt. 15.3.01 was issued proposing recovery of differential duty of Rs.13,88,269/- together with interest, under the proviso to Section 11A (1) of the Central Excise Act, and proposing imposition of penalty under Section 11AC read with relevant Rules. The notice was adjudicated by the Additional Commissioner who upheld the demand together with interest and also imposed penalty of equal amount. The Commissioner (Appeals) accepted the contention of the assessees that the demand for the period October 1996 to 16.3.2000 was barred by limitation and restricted the demand for the period from 17.3.2000 to 30.6.2000 which worked out to Rs.2,45,563/- and he also reduced the penalty to Rs.50,000/-. Hence this appeal by the Revenue.
2. We have heard both sides. It is the case of the department that assessees were guilty of suppression as they had not filed any declaration as required under the second proviso to Rule 173C of Central Excise Rules, 1944. However, we find that the assessees had filed declaration in terms of sub-rule (3A) of Rule 173C regarding their market pattern. They had also filed worksheets showing item wise details of dispatch, value, forwarding charges and differential duty along with RT-12 Returns filed every month. In the worksheet, they had indicated quantity sent for conversion and the rate adopted. Thus it is clear that the department was aware that the assessees were sending cotton yarn to job worker for conversion and selling hosiery fabrics at a particular value. Hence all the relevant information was available with the department. If the department was of the view that the value adopted by the assessees for clearances to job worker was much lesser than the value adopted for sales made from depot to other customers, show-cause notice alleging undervaluation and proposing to recover differential duty should have been issued within the normal period of limitation. We, therefore, agree with the finding in the impugned order that the extended period of limitation is not available to the department and that the demand for the period prior to 17.3.2000 is time barred. We, accordingly, uphold the impugned order and reject the appeal.
(Operative part of the order was
pronounced in open court on 21.5.09)
(P.KARTHIKEYAN) (JYOTI BALASUNDARAM)
MEMBER (T) VICE-PRESIDENT
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