Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs Cce Ahmedabad on 20 May, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT:
II
Appeal No.E/2724/2006
Arising out of: OIA No.91/06-(Ahd-I), dt.6.6.06
Passed by: Commissioner of Central Excise & Customs (Appeals), Ahmedabad
For approval and signature:
Mrs. Archana Wadhwa, Honble Member (Judicial)
Dr. P. Babu, Honble Member (Technical)
1. Whether Press Reporters may be allowed to see the No
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 their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant:
CCE Ahmedabad
Respondent:
M/s Midco Ltd.
Represented by:
Shri Anand Nainawati, Adv. for Assessee.
Shri R.Srova, JDR for the Revenue.
CORAM:
MRS. ARCHANA WADHWA, HONBLE MEMBER (JUDICIAL) DR. P. BABU, HONBLE MEMBER (TECHNICAL) Date of Hearing/Decision:20.05.11 ORDER No. /WZB/AHD/2011, dt.20.05.11 Per: Dr. P. Babu:
The present appeal is filed by the Revenue against Order-in-Appeal passed by Commissioner(Appeals), Central Excise, Ahmedabad (No.91/2006(Ahd-I), dt.31.5.06. The facts of the case are that M/s Mercantile and Industrial Development Co., Ahmedabad (M/s MIDCO) was issued a Show Cause Notice dt.15.2.05 invoking the larger period under Section 114A for recovery of Central Excise duty of Rs.17,24,407/- (Rupees Seventeen Lakhs, Twenty Four Thousands, Four Hundred, Seven and Paise Eighty One only). This amount became due because of receipt of certain amounts towards certain heads of income like freight, insurance, raw material purchase etc, which allegedly were not accounted for in the invoices. In the Order-in-Original, the adjudicating authority i.e. Jt.Commissioner confirmed the demand and imposed a penalty and ordered levy of interest. In the Order-in-Appeal, it was held by Commissioner(Appeals) that the demand is fully barred by limitation and imposition of penalty, demand of interest was not allowed. While filing the appeal against this order, Revenues main contention was that the extended period of 5 years is rightly invocable and there was clear suppression of facts and mis-declaration. M/s MIDCO, the respondents in this case was all along taking stand that their trial balance sheet showed that there were some adjustments in recording price data of inputs, initially assigned in the trial balance sheet based on an estimate with reference to the price data of the previous year where the final price reflected the actual price (hence the variation). It was also argued that the impugned demand is barred by limitation as they were submitting all relevant documents to the audit party and to the Revenue. There was no disclosure of the material fact as to what is that which had been suppressed. They contended that there was no delay in filing RT-12 /ER-1. It was stated by them that the audit report was available on 26.7.02 and the Show Cause Notice issued as late as on 15.2.05 for demanding duty pertaining to since 2000-2001. They have heavily relied upon Hon'ble Supreme Court judgment in the case of Nizam Sugar Factory Vs. Collr.of Andhra Pradesh in C.A. No.2747 of 2001 and also in the case of Collr.C.E. Vs. Chemphar Drugs & Liniments 1989 (40) ELT 276 (SC).
2. We find that the departments appeal is restricted only to the issue of limitation and the merits of the case were not the subject matter for discussion in the appeal nor any reference made. We, therefore, examine only the question of limitation on the basis of various facts, evidences and the case-laws on this issue. It is an admitted fact that the Show Cause Notice was issued only on 15.2.05 demanding dues from 2000-2001 onwards. It is also an admitted fact that the audit report was made available as early as in July 2002 and the respondents were filing RT-12 or ER-1 without any delay. Revenue has not contradicted the above. Going through the facts of the case, we cannot comprehend as to what has been suppressed from the Revenue by the assessee. If this is not made specific, the entire argument on extended period will remain only as a bald statement.
3. It was contended by the Revenue that ratio of the judgment in the case of in the case of P.B. Pharmaceuticals (P) Ltd. Vs. CCE 2003 (150) ELT 14 (SC) and in the case of CCE Vs. Chemphar Drugs & Liniments 1989 (49) ELT 276 (SC), are not applicable to the instant case. However, no cogent reasons were adduced for making this observation.
4. For a while, let us take cognizance of judgment in the case of Chemphar Drugs & Liniments case. The relevant portion of this judgment reads as under:
In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts referred to hereinbefore do not warrant any inference of fraud. The assessee declared the goods on the basis of their belief of the interpretation of the provisions of the law that the exempted goods were not required to be included and these did not include the value of the exempted goods which they manufactured at the relevant time. The Tribunal found that the explanation was plausible, and also noted that the Department had full knowledge of the facts about manufacture of all the goods manufactured by the respondent when the declaration was filed by the respondent. The respondent did not include the value of the product other than those falling under Tariff Item 14E manufactured by the respondent and this was in the knowledge, according to the Tribunal, of the authorities. These findings of the Tribunal have not been challenged before us or before the Tribunal itself as being based on no evidence. In that view of the matter and in view of the? requirements of Section 11A of the Act, the claim had to be limited for a period of six months as the Tribunal did. We are, therefore, of the opinion that the Tribunal was right in its conclusion. The appeal therefore fails and is accordingly dismissed.
5. Hon'ble Supreme Court in the case of Pushpam Pharmaceuticals Co. Vs. Collr.of C.E., Bombay 1995 (78) ELT 401 (SC), has further observed that mere omission to disclose the correct information not a suppression of facts unless it was deliberate to escape from payment of duty. Where facts are known to both the parties, it cannot be held that there was suppression of facts. The relevance of this judgment cannot be just brushed aside stating that it was mandatory on the part of the assessee to file CL/PC declaration etc at the material time. Veritably, in this case also, respondents were filing all periodical returns and submitted documents to the audit.
6. We also observe that calling for certain records, copies of invoices, etc were brought in effect vide Notification No.17/2005 dt.31.3.05 which mentions that for the earlier period, there was no bar not to call for copies of such documents. It is significant that when the audit report was made available, submission of copies of invoices was not mandatory. When the audit report was available as early as in July 2002 and there was no convenience forthcoming reasons for delay in issuance of Show Cause Notice till 4.5.06, the justification for invoking of provisions of Section 11A cannot be appreciated.
7. In view of the above circumstances, we find that there is no justification for invoking the extended period under the provisions of Section 11A resulting in making demands barred by limitation. Imposition of penalty and demand of interest, therefore, is not sustainable.
8. We, therefore, hold that the impugned order of Commissioner (Appeals) is sustainable and as a result, we reject the appeal filed by the Revenue.
(Pronounced in Court)
(Archana Wadhwa) (Dr. P. Babu)
Member (Judicial) Member (Technical)
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