Custom, Excise & Service Tax Tribunal
Sri Pitabass Chhotrav Director vs Rourkela on 16 April, 2025
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.2
Excise Appeal No.76746 of 2016
(Arising out of Order-in-Original No.03/CCE/CEX/RKL/2016-17 dated 15.07.2016
passed by Commissioner of Central Excise, Customs & Service Tax, Rourkela)
M/s Maa Alloys Private Limited
(Plot No.524, Chikatmati,PO-Kalunga,PS-Brahmanitarang, Dist.-Sundargarh, Odisha-
770031)
Appellant
VERSUS
Commissioner of Central Excise,Customs & Service Tax,Rourkela
(KK-42, Civil Township, Rourkela-769004)
Respondent
WITH Excise Appeal No.76747 of 2016 (Arising out of Order-in-Original No.03/CCE/CEX/RKL/2016-17 dated 15.07.2016 passed by Commissioner of Central Excise, Customs & Service Tax, Rourkela) Shri Pitabass Chhotray, Director of M/s Maa Alloys Private Limited (Plot No.524, Chikatmati,PO-Kalunga,PS-Brahmanitarang, Dist.-Sundargarh, Odisha- 770031) Appellant VERSUS Commissioner of Central Excise,Customs & Service Tax,Rourkela (KK-42, Civil Township, Rourkela-769004) Respondent APPERANCE :
Shri Kartik Kurmy, Advocate for the Appellant Shri Subrata Dey, Authorised Representative for the Respondent CORAM:
HON'BLE MR.R.MURALIDHAR, MEMBER (JUDICIAL) HON'BLE MR.K. ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO.75910-75911/2025 DATE OF HEARING : 20 FEBRUARY 2025 DATE OF PRONOUNCEMENT : 16 APRIL 2025 2 Excise Appeal Nos.76746,76747/2016 Per R.Muralidhar :
The Appellant is engaged in the manufacture and sale of C. I. Ingot Moulds and C. I. Grinding Media Balls falling under Sub-Heading 8454.20.20 and Sub-Heading 7325.91.00 of CETA. The C.I. Ingot Moulds are used in Ingot manufacturing factories as Moulds to give shape to hot metal. The hot metal is poured into C.I. Ingot Moulds which after cooling get shape of inner surface of the Ingot Mould. The C.I. Grinding Media Balls are used in Clinker Crusher etc. for grinding purposes.For manufacture of their finished goods, the Appellant uses Pig Iron and C.I. Scrap in their Coupla Furnace. On 23-03-2011 officers of "DGCEI" conducted simultaneous search of the factory / office premises of the appellant and the residences of the Director and other officials.
2. In the course of searches, a hand written Ledger was recovered from the premises of the Office Asst Ajay Kumar Das, showing clandestine purchase of raw material. Alleging that the Appellant had procured 10,936.825 MT of raw materials i.e. Pig Iron/C.I. Scrap clandestinely which was used to manufacture said 9315.390 MT of C.I. Ingot Mould/C.I. Grinding Media Balls which are clandestinely cleared without payment of duty. The Show Cause Notice dated 25.03.2013, was issued demanding the Excise Duty of Rs.3,74,25,903/-. The appellant contested the issue on the ground that the Ledger contained entries pertaining to various parties. Hence, the entries in the Ledger cannot be relied on to assume clandestine manufacture / clearance by the appellant. Further, they submitted that based on input/output ratio arriving at the duty demand is not legally sustainable. They contacted 3 Excise Appeal Nos.76746,76747/2016 some of the third parties and could get hold of their purchases details, which were produced before the Adjudicating authority. The Adjudicating authority took into account the details of such purchases pertaining to the third parties and dropped a portion of the demand and confirmed the balance demand of Rs.1,97,72,283. He also charged interest and imposed penalty on the appellant and penalty of Rs.5,00,000 the Director of the appellant. Being aggrieved, the appellant has filed this appeal before the Tribunal.
3. The Ld Counsel appearing on behalf of the appellant makes the following specific submissions :
3.1 It is contended that the said ledger does not relate to them and it contains entries of even third parties for purchase of raw material, hence, no question of production of impugned goods applying Input/Output by them does arise to allege clandestine removal thereof.
In the impugned Order under Para 8.11 the Ld. Commissioner has accepted that the said Ledger also relates to third parties like M/s Perfect Steel Corp., M/s Epic Alloys, M/s Kanak Coke, M/s J.M.Steel, M/s DD Iron Traders etc., which is evidenced from the excise invoices for the said quantities furnished by the Appellant upon collecting the same from third parties which clearly shows that the said raw materials were not received by the Appellant but the said third parties. It is submitted that when the Ld. Commissioner has accepted that the said "Ledger" contains third party records, then the said Ledger cannot be related to the Appellant and no presumption of use of such raw material in manufacture of finished goods by the Appellant does arise. To prove 4 Excise Appeal Nos.76746,76747/2016 that the entries of raw materials in said ledger relates to third parties, the Appellant collected "Invoices" from such parties that the transactions related to such parties. The Ld. Commissioner accepting contention of the Appellant that said entries relates to third parties, reduced demand from Rs.3,74,25,903/- to Rs.1,97,72,283/-, on the ground that the Appellant could not produce invoices of third parties to that extent. The Appellant has now produced before this Hon‟ble Tribunal under Annexure-E (Page 1028 to 1205). It is submitted that when the entries were clearly related to third parties, the burden was on department to investigate the same with such parties. The Ld. Commissioner arbitrarily upheld demand of Rs.1,97,72,283/- on the ground that the Appellant could not produce balance invoices. It is submitted that once the Appellant has sufficiently demonstrated that the said Ledger relates to third parties, the burden shifts on department to prove that it relates to the Appellant.
3.2 The Appellant most humbly submits that after passing of the impugned Order they have collected further third party invoices to prove that the balance quantity of raw material also does not relate to them but to third parties, which are placed under "Annexure- "E" [Page 1028 to 1205 of Paper Book].
3.3 It is not out of place hereto mention that Sri Ajay Kumar Das in reply Q.No.10 of his statement dated 19-09-2011 stated that he does not know/remember why he brought the said Ledger to his residence. Sri Ajay Kumar Das is never examined in accordance with Sec.9D of the Act, to ascertain why said "Ledger" contain third party record. An oral 5 Excise Appeal Nos.76746,76747/2016 statement cannot become relevant piece of material unless tested in accordance with Section 9D as held by this Hon‟ble Tribunal in the case of Jai Balaji Industries Ltd. Vs. CCE [2023-VIL-771-CESTAT-KOL- CE] [Para 132.11 (Page 70]).
3.4 The Appellant further submits that they consistently contended that the purported dispatch entries relates to clearances for repair of C.I. Ingot Moulds free of any charge. Under Para 8.7 and Para 8.9 of the impugned Order, the Ld. Commissioner accepted that the C.I. Ingot moulds/C.I. Grinding Media Balls are of such a nature that after some use they get damaged and after some repair they can be re-used. Sri Pitabass Chhotray, Director also in his statement dated 20-01-2012 in reply to Q.No.12 and Q.no.14 stated that the entries in question in the instant case relates to repair of C.I.Ingot Moulds. Sri Ajay Kumar Das, Office Assistant in his statement dated 19-09-2011 in reply to Q.no.13/14 categorically stated that the unmatched entries appearing in the said document (Document No. 01/DGCEI/RRU/MAPL/ AKD-Resi/11) relates to „repairs‟ of C.I. Ingot Moulds. Sri Anirudha Sutar, Accountant also in his statement dated 21-09-2011 in reply to Q.No.13 & Q.No.17 categorically stated that they undertake repair work of C.I.Ingot Mould for their buyers and the C.I. Ingot Mould very often requires repairing due to constant use. He further stated that the differential entries relates to repair of C.I. Ingot Mould and not any clandestine removal of finished goods.
3.5 The allegations/findings in the instant case are entirely based on assumptions and presumptions. There is no corroborative 6 Excise Appeal Nos.76746,76747/2016 tangible/cogent evidence in support of the charge as can be deduced from the following points :
(i) there is no evidence of clearance or transportation/clearance of the impugned goods.
(ii) Enquiries with buyers did not prove purchase of impugned goods from the Appellant (Para 3.3 of SCN).
(iii) there is no evidence of production of impugned goods by the Appellant as the raw material in the ledger (Doc.
01/DGCEI/RRU/AKD-Resi/11 relates to third parties as accepted under Para 8.10 & Para 8.11 of the impugned order hence, no question of Input/Output norms.
(iv) there is no evidence of receipt of unaccounted raw materials for the manufacture of impugned goods.
(v) there is no evidence of transportation of raw material.
(vi) there is no evidence of extra use of labour for production of goods and payment of wages.
(vii) there is no evidence of consumption of any extra electricity required for manufacture of the impugned goods.
(viii) there is no evidence of flow back of funds.
(ix) there was no excess/shortage of raw material detected in the physical stock taking.
(x) 55 Invoices were unused hence no question its use for removal of impugned goods does arise. Categorical finding of Ld. Commissioner under Para 8.12 and Para 8.22 of the impugned Order has accepted and held that the said 55 invoices were intended for future clearances which means it were never used for clearance of impugned goods.
(xi) there is no confession of guilt.
3.6 The Appellant relies on the judgments :
(i) Arya Fibres Pvt. Ltd. Vs. CCE (2014) 311 ELT 529 (Tri.-
Ahmd.) [Para 40];
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(ii) Continental Cement Company Vs. UOI (2014) 309 ELT 411 (All.) [Para 12];
(iii) Jai Balaji Industries Ltd. Vs. CCE [2023-VIL-771- CESTAT-KOL-CE] [Para 14.7, Para 15.5].
3.7 The Appellant most humbly submit that the dispute in the instant case relates to the period from 01-04-2008 to 30-03-2009 while the Show Cause Notice is issued on 25-03-2013, hence, the entire demand in the instant case is barred by normal period of limitation. None of the ingredients necessary for invoking extended period of limitation exists in the instant case. The Appellant further submits that in the instant case the entire demand on the basis of which the allegations are framed were seized on 23-03-2011 and the statement were recorded from different persons latest by 20-01-2012, whereas the Show Cause Notice is issued on 25-03-2013 i.e. after expiry of normal period of limitation. Hence, the appellant prays that the demand for the extended period may be set aside on account of time bar.
4. The Ld A R appearing on behalf of the Revenue submits that the clandestine purchase has been established by way of the entries found in the Ledger being maintained by the appellant‟s staff. The appellant was contending that the Ledger contained the entries pertaining to other parties also. He was given opportunity to bring in evidence to this effect. When the appellant has produced some invoices pertaining to the purchase of the third parties, the same have been given due consideration by the Adjudicating authority to drop the demand to the 8 Excise Appeal Nos.76746,76747/2016 extent of Rs.1,76,53,620/- However, when the appellant was not in a position to bring in further evidence towards purchase by the third parties, the Adjudicating authority has correctly confirmed the demand of Rs.1,97,72,283/-. Since the appellant is claiming that they have got access to some more such third party purchases, the same is required to be verified for their veracity and cannot be considered directly at this stage by the Tribunal. Reiterating the findings of the Adjudicating authority, the Ld AR prays that the present appeal may be dismissed.
5. Heard both the sides. Perused the Appeal papers as also written and oral submissions made by both the sides.
6. Admittedly, in the course of search, the officers have come across the Ledger being maintained by Sri Ajay Kuma Das. The entries therein purportedly showed the purchase of the raw material, pig iron / C I scrap, without proper Invoice, clandestinely. Such entries admittedly have been found even in respect of some other parties like M/s Perfect Steel Corp., M/s Epic Alloys, M/s Kanak Coke, M/s J.M.Steel, M/s DD Iron Traders etc. Applying the input / output ratio of raw materials vis- a-vis the Revenue has arrived at the alleged clandestine clearance. As per the Revenue, the clandestine purchase of 10,936.825 MT of raw materials i.e. Pig Iron/C.I. Scrap has been converted into finished goods to the extent of 9315.390 MT, which have been cleared on clandestine basis.
7. Both sides admit that the Ledger recovered had entries pertaining to appellant as well as some more parties. While the demand was issued treating the entire purchase pertaining to appellant, after the 9 Excise Appeal Nos.76746,76747/2016 appellant has made some efforts to get hold the invoices pertaining to the third parties, the adjudicating authority has considered the same and dropped the demand proportionately. He has confirmed the demand on the ground that the appellant has not produced the evidence towards the balance raw materials pertaining to other parties. We do not subscribe to this view. First of all, inspite of having the entries in different names, the Revenue could not have issued the SCN to appellant towards the entire quantity. By accepting the copies of the Invoices pertaining to the other parties, the Revenue admits that part of the demand is not sustainable. As a matter of fact, it is not the responsibility of the appellant to get hold such invoices from the third parties. They have made efforts and succeeded in getting some copies. They have enclosed some more invoice copies. We feel that this exercise is not required to be taken up by the appellant. The Revenue cannot be selective in holding that part of the Invoices as pertaining to the third party and to hold the balance portion to the appellant without any concrete evidence, when the Ledger entries are in the name of the third party.
8. Now coming to the stand of the Revenue that the alleged clandestinely purchased raw materials have been used in the clandestine manufacture of finished goods, we do not find that the Revenue has brought any cogent corroborative evidence towards consumption of other raw materials [other than scrap as per ledger] like coal and other consumables to have been bought clandestinely. The input / output ratio on its own cannot prove the actual manufacture. 10
Excise Appeal Nos.76746,76747/2016 There is nothing to indicate that the electricity consumption, movement of the inwards vehicles, engagement of labour etc. to prove the clandestine manufacture have been brought in by Revenue. Once the goods are manufactured in a clandestine manner, they are also cleared clandestinely. No corroborative evidence in the form of outward movement, cash transactions towards sale proceeds etc have been recorded by the Revenue.
9. In the case of Shri Mahavir Ferro Alloys Pvt. Ltd. Vs CCE & CGST Rourkela - Appeal No.75510-75511/2016 - Final Order No.11.02.2025, wherein one of us, was in the Bench, similar issue of allegation of clandestine removal based on input / output ratio was taken up. The Bench held as under :
"17. On going through the relevant portion of the Show Cause Notice and the Order In Original [ Para 7.9 and 7.9 ], we find that the Revenue has considered the input / output ratio of 1 : 1.67 as sacrosanct based on the expert opinion of Institute of Mineral Technology, Govt of India and another opinion of Popuri Engineering & Consultancy Services, Hyderabad. There is nothing to indicate that the Revenue has made independent study of the working of the appellant's plant to take some sample outputs to study the pattern of input / output ratio. As per the data of Purchase of Iron Ore Fe Content, Grade-wise Coal purchased, Input / output ratio declared by the appellant in their Annual Returns, reproduced in the previous paragraphs by way Table, the year-wise details show that the input / output ratio ranges between 1 : 1.92 in 2008-09 to 1 : 1.87 during the period April 2009 to February 2010. The contents of the Table are all declared figures and are verifiable. There is nothing to indicate that due consideration was given for these submissions by the Adjudicating authority before coming to his conclusions. His 11 Excise Appeal Nos.76746,76747/2016 conclusions seem to be flowing directly from the input/output ratio adopted by the Dept at the time of issuing the Show
18. The output is dependent on several factors other than the input / output of the main raw material, iron ore. Even within Iron ore, the Fe content would play an important role. Other than this, we have to consider the usage of the quality of coal, dolomite, the capacity of kiln etc. Thus a simple formula of input / output purely based on the iron ore usage, would not fit all the manufacturers of Spong Iron. We find that such attempts have been made by the Revenue in the past which have come up for consideration before this Bench. In the case of CCE Vs Agrasen Sponge Pvt Ltd - Final Order No.77819/2024 dated 12.12.2024, an identical issue was before the Bench. The relevant extracts are as under :
"2.2 Scrutiny of the Daily Stock Account, Raw Material Registers and the returns submitted by the Noticee revealed that during the period from April, 2007 to January, 2010 (excluding the period form July, 2008 to October, 2008), the Noticee has recorded production of 42045.00 MT Sponge iron only against consumption of 97664.45 MT of Iron Ore. Thereby the average consumption for manufacture of 1 MT of Sponge Iron was 2.32 MT of Iron Ore. On scrutiny of iron ore purchase invoices pertaining to the impugned period, it was found that the Noticee had procured iron ore of Fe content in the range of 63% to 65%. 2.3 Further, it was found that the standard/average consumption of power per MT of production of Sponge Iron was 162.00 KWH. The Noticee has shown a substantially high rate of consumption of iron ore as well as power as compared to standard consumption pattern suggested in metallurgy Le around 1.67 M.T. of iron ore and 75-100 Kwh of power for manufacture of 1 M.T. of Sponge Iron. 2.4 The expert opinion obtained from leading technical consultants in the field of production of sponge iron supports the above view of the ratio of consumption to production is 1.67:1, they are as under:
M/s Popuri Engineering & Consultancy Services, Hyderabad, who are experts in the field of designing/drawing and providing 12 Excise Appeal Nos.76746,76747/2016 sponge iron technology and who have installed almost all sponge iron plants in Odisha, including that of ASPL, opined that the consumption to production ratio is 1.67:1 and the average power consumption is in the range of 70-100 KWH for production of 1 M.T. of Sponge Iron. ii) M/s Industrial Technical Consultant, Raipur, who are experts in the field of designing/drawing and providing sponge iron technology have opined that the consumption to production ratio is 1.67:1 and the average power consumption is in the range of 90 KWH for production of 1 M.T. of sponge Iron."
We find that in this case demand sought to be raised against the Respondent on the basis of estimated production as per input/output ratio of 1:1.67MT and electric consumption is 162 KW for manufacture of 1 MT Sponge Iron. All these basis for confirmation of demand are on estimate basis and there is no tangible evidence has been brought by the Revenue on record from where the Respondent procure other raw materials to manufacture such a huge quantity of Sponge Iron like coal and iron ore."
19. Similar issue had come up before this Bench in the case of Aryan Ispat and Power Pvt. Ltd. Vs. CCE - FINAL ORDER NO. 77490 - 77492/2023 Dated: 17-11-2023 :
"10. From the Show Cause Notice and the OIO passed, it gets clarified that the demand has been made towards excess production of 11089.730 MT of Sponge Iron during the period July 2006 to November 2009 solely based on the formula adopted by the Department to arrive at the estimated production of iron ore to this extent. While the purchase quantity of iron ore has been taken into account and the electricity consumption has been considered, as pointed out by the Appellant, the manufacture of sponge iron also requires two other important raw 13 Excise Appeal Nos.76746,76747/2016 materials/consumable viz., Coal & dolomite. In the entire investigation, the Department has not brought out any evidence towards excess procurement of coal and dolomites. Since the coal is bought from the coal mine, proper records were kept both by the vendor as well as by the receiver. Such huge quantity of coal could not have been bought by way of cash. There is also no evidence towards deployment and movement of hundreds of vehicles to transport such huge quantity of coal and dolomite."
20. We observe that even this case, while the emphasis is only account of usage of iron ore, no corroborative evidence has been brought in respect of other inputs like dolomite and coal also which should have been consumed in order to carry out the clandestine production.
21. Going by the factual matrix, read with the cited case laws, makes us to come to a conclusion that on the first count of (a) that is whether the clandestine manufacture has taken place, the Revenue has faltered and has effectively failed. On this count alone the impugned order gets dismissed and appeal is allowed.
24. We find that the entire focus of the Revenue in this case has been on proving the clandestine manufacture based on the input/output ratio as given by expert third party. We do not see any effort has been made by the Revenue on this front. We have seen from the above submissions of the appellant :
(i) There is no evidence of removal of 11542 MT of Sponge Iron;
(ii) There is no evidence of acceptance of buyers;
(iii) There is no evidence of flow of back of funds;
(iv) There is no evidence of out of account purchase of raw material;
(v) There is no evidence of out of account transportation of raw material;
(vi) There is no acceptance of transporters for transporting raw materials out of account;14
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(vii) There is no acceptance of sellers of raw materials;
(viii) There is no evidence of extra use of labour and payment of wages etc.;
(ix) There is confession of guilt by the Appellant;
(x) There was no excess shortage of raw material detected on the day of search;
25. Removal of 11542 MT of sponge iron would require movement hundreds of vehicles. No private records have been seized showing any cash transactions. No statements have been recorded from the purported buyers of the sponge iron. Thus, we not see an iota of evidence being gathered by the Revenue to fortify their allegation towards clandestine removal.
26. We again refer to the Arayan Ispat cited supra, wherein in respect of non-availability of corroborative evidence and relevant case laws have been discussed.
27. Applying the ratio of the above case read with the case laws referred within, to the factual matrix of the present case, we find that in the absence of bringing in any evidence towards clandestine clearance of Sponge Iron ore, even on this count the Revenue's case fails. Hence, we set aside the confirmed demand even on this count and allow the appeal."
10. Coming to the aspect of non-corroboration by way of other evidence, the case law of Hon‟ble Allahabad High Court in the case of Continental Cement Co. Vs. UOI [2014 (309) E.L.T. 411 (All.), would be useful for reference. The High Court has held as under :-
"12. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the 15 Excise Appeal Nos.76746,76747/2016 manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects :
(i) To find out the excess production details.
(ii) To find out whether the excess raw materials have been purchased.
(iii) To find out the dispatch particulars from the regular transporters.
(iv) To find out the realization of sale proceeds.
(v) To find out finished product receipt details from regular dealers/buyers.
(vi) To find out the excess power consumptions.
13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department.
14. In the instant case, no investigation was made by the Department, even the consumption of electricity was not examined by the Department who adopted the short cut method by raising the demand and levied the penalties. The statement of so called buyers, namely M/s. Singhal Cement Agency, M/s. Praveen Cement Agency; and M/s. Taj Traders are based on memory alone and their statements were not supported by any documentary evidence/proof. The mischievous role of Shri Anil Kumar erstwhile Director with the assistance of Accountant Sri Vasts cannot be ruled out.
15. In view of the above, we are of the opinion that when there is no extra consumption of electricity, purchase of raw materials and transportation payment, then manufacturing of extra goods is not possible. No purchase of raw material out side the books have been proved.
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16. In the light of the above discussions and considering the totality of the case, we are satisfied that no case is made out for extra so called clandestine sale of the Portland Cement to the said parties. We are satisfied that the first appellate authority has rightly deleted the addition and cancel the penalties. Hence we hereby set aside the impugned order passed by the Tribunal and restore the order passed by the first appellate authority, along with the reasons mentioned herein.
17. In the result, all the appeals filed by the appellants are hereby allowed."
11. In the case of Arya Fibres Pvt. Ltd. & Others Vs. CCE Ahmedabad-II [2014 (311) E.L.T. 529 (Tri. - Ahmd.), it has been held :
"9. It is well settled that the charge of clandestine manufacture of the dutiable goods and removal thereof without discharging the duty liable by an assessee, cannot be established on assumptions and presumptions. Such a charge has to be based on concrete and tangible evidence. In this context, reference may be made to Oudh Sugar Mills Ltd. v. Union of India - 1978 (2) E.L.T. (J 172) (S.C.), wherein the Apex Court has observed that demand of duty cannot be raised on the strength of assumptions and presumptions. There should be sufficient evidence of the removal of the goods alleged to have been manufactured and cleared without payment of duty. The charge of clandestine removal must be based on tangible evidence and not on inferences involving unwarranted assumptions. This very principle of law had been applied by the Tribunal in a number of cases and out of those, few are, Amba Cement and Chemicals v. CCE - 2000 (115) E.L.T. 502 (Tribunal) = 2000 (90) ECR 265, Gurpreet Rubber Industries v. CCE - 1996 (82) E.L.T. 347 and Madhu Foods Products v. CCE - 1995 (76) E.L.T. 197."17
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12. In respect of the confirmed demand on account of unmatched entries in respect of C1 Ingot Moulds, the appellants have been maintaining that the repairs of such Moulds using the raw materials have not been taken into account. We find that no verification has been carried out on this issue before confirming the demand. Even otherwise, no corroborative evidence towards their manufacture, clearance and realization by cash has been brought in by the Revenue.
13. Considering the factual matrix case of the case and applying the ratio of the case laws, we find that the confirmed demand is not legally sustainable. Hence we set aside the same on merits.
14. Coming to the arguments of the appellant on limitation, it is on record that the relevant records were seized on 23-03-2011 and all the statements were recorded from different persons latest by 20-01-2012. Hence, the Dept had to come to know of entire transaction by that date. Therefore, there was no need for them to wait for another One year Two months to issue the SCN on 25-03-2013. The Allahabad High Court in the case of The Commissioner Of Central Excise ... vs M/S Suvidha Engineers India Ltd. on 8 February, 2017 [CEA 82 of 2014], held as under :
The questions of law sought to be answered read as under:
"(1) Whether on the facts and in the circumstances of the case, the CESTAT, New Delhi has committed an error of law in holding that show cause notice was time barred by taking the cognizance of respondents letter dated 5.9.05 through which the respondent 18 Excise Appeal Nos.76746,76747/2016 only submitted details of monthly payments received from their customers which was not adequate and sufficient for the purposes of arriving at the correct taxable value and correct taxable amount of Service Tax?
Having heard learned counsel for both sides at length and having perused the entire facts on record and the judgement of the tribunal, we are of the opinion that the tribunal too has taken a similar view wherein it records in para 7 that the assessee through their letter dated 5.9.2005 had submitted month-wise details of all payment received by them against HVAC works for the period from 1.7.2003 to 15.6.2005. Once the details of the value of taxable services were available to the department on 5.9.2005, the tribunal came to the conclusion that there was no reason to invoke the extended period under the proviso to section 73 (1) of the Finance Act, 1994.
The tribunal has therefore rightly rejected the plea of the department for extension of limitation and application of the proviso to section 73 (1) of the Finance Act, 1994. In view of the above, we therefore uphold the impugned order of tribunal and answer the questions in favour of the assessee and against the department.
15. Applying the cited case law, we hold that the confirmed demand for the extended period is legally not sustainable and hence the same is being set aside on account of time bar also.
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16. The Appeals stand allowed. The appellants would be eligible for consequential relief, if any, as per law.
(Pronounced in the open court on 16.04.2025)
(R.Muralidhar)
Member (Judicial)
(K.Anpazhakan)
mm Member (Technical)