Customs, Excise and Gold Tribunal - Tamil Nadu
Chandilya Chemicals vs Commissioner Of Central Excise on 3 February, 1998
Equivalent citations: 1998(60)ECC421, 1999(114)ELT695(TRI-CHENNAI)
ORDER T.P. Nambiar, Member (J)
1. The present appeal is directed against the demand of duty of Rs. 94,587/-. The merits of the case are not disputed by the learned Counsel for the appellants Shri K. Shankararaman. He stated that the whole demand is barred by limitation. In this connection he pointed out that the appellants are availing of the benefit of assessment in terms of Rule 173C(ii). Therefore, he stated that for the assessment under the invoice, they were submitting proforma invoice and GP1 along with RT 12 returns regularly. It was therefore, pointed out that from the invoice above it can be seen that the appellants were removing the goods from their factory to their Depot. He drew our attention to Annexure E which is the proforma invoice dated 18-7-1992. It was therefore, contended that the department was in the knowledge of the fact that the appellants were removing the goods from the factory to their office premises i.e. the depot. He pointed out that if the department wanted to verify the fact it was for them to have verified the same and if the RT 12 returns were assessed finally by the department they cannot turn around and say that there was wilful suppression of fact. It was pointed out that the department was at liberty to make assessment provisional. On the contrary they have finally assessed the same and it cannot be said that there was omission which was wilful. The learned Counsel also relied upon the decision of the Tribunal in the case reported in 1997 (96) E.L.T 191 wherein at para 5 it is held as follows :
"The respondent was not required by law to disclose to the department the prices at which it sold the goods from its depot, where the goods were taken after payment of duty. Therefore, omission by the respondent to furnish this information would not amount to suppression of facts. There is nothing to suggest that the assessee wilfully made wrong statement. We do not find sufficient material to interfere with this finding of the Additional Collector. It is therefore, not necessary for us to go into the other aspects of the case".
Relying upon the above decision, he pointed out that their omission to furnish the price at which they sold the goods from their depot is not an omission and the same was not with intent to evade payment of duty as there was no such duty cast on the appellants to furnish this information. He, therefore, pointed out that it is only when the appellants were required to furnish any information with an intent to evade payment of duty and if the same was not furnished, the longer period of limitation is invocable.
2. Shri S. Murugandi, the learned DR for the department in this connection drew our attention to para 10.2 of the impugned order wherein it is stated as follows :
"10.2. On the other hand, it is admitted repeatedly in the instant case, by the notice both in their written reply dated 20-1-1995 to the show cause notice and the written submissions filed on the date of personal hearing, that they had filed declaration that the prices quoted in the invoice (raised at the time of clearance from the factory) in respect of each items cleared conform to the definition of value as given in Section 4 of Central Excise and Salt Act. The value defined Under Section 4 ibid refers to the sale price to an independent customer, and certainly not to any price declared in the proforma invoices for statistical purposes. In the face of this specific declaration, the normal presumption would have been only that the price reflected in the proforma invoice would be the actual price to be charged at the time of sale of the goods. Presumably in the absence of any further disclosure by the noticee about charging of a differential price at the time of sale from the Head Office/Branch Office, the officers would have been well within their right to have presumed that the value reflected in the proforma invoices is the actual sale price confirming to value defined Under Section 4 ibid. Therefore, in the light of the initial declaration while availing invoice based assessment, the onus was squarely on the noticee to have brought to the notice of the department, the prices subsequently charged on actual sales. To this extent, they cannot escape from the charge of suppression of the correct value for assessment."
He, therefore, pointed out that the assessee tried to suppress the fact of raising final sale invoice subsequently from the H.O. to Branch Office for the higher price. He therefore, pointed out that there was suppression of fact.
2. We have considered the submissions made before us. It is now seen that the assessee was filing RT 12 returns as well as the proforma invoice and the GP 1. In the proforma invoice itself it was mentioned that they were clearing the goods from their factory to their depot. Therefore, the fact that they were clearing the goods from their factory to the depot was known to the department. If the department wanted any further information in this regard it was open to the department to have sought from the assessee. But without any such steps taken the RT 12 returns were finally assessed by the department. As held by the Tribunal in the above said case, the assessee is not required under the law to disclose to the department the price at which they sell the goods from the depot after payment of duty. If the department wanted any further information to be furnished in this regard, the same could have been called for. The fact of transfer of the goods from the factory to the depot was made known by the appellants. Since there was no duty cast on the appellants to disclose to the department the price at which the goods are sold from the depot it cannot be said that there was any wilful suppression of fact or omission on the part of the appellants in this regard with intent to evade payment of duty. In this connection the learned Counsel also relied upon the decision of the Hon'ble Supreme Court in the case of Pushpam Pharmaceutical Co. v. C.C., Bombay, reported in 1995 (78) E.L.T 401 (S.C.). In that particular decision, their Lordships held that the provisions of Section HA carves out an exception and permits the authority to exercise the power within 5 years. It has been held that it does not mean that every omission is an omission which is deliberate. It must be shown that the act is deliberate. Where the facts are known to both the parties the omission by one to do what he might have done and not that he must have done does not render it suppression of fact. Therefore, when the facts are known to the department, that the goods are transferred from the factory to their depot it cannot be said that the party must have intimated the department about the sale price, but it is not an act which the appellants must have done because there is no such requirement under the law to intimate the sale price from the depot. There is a clear distinction brought out by the Hon'ble Supreme Court and it is only the act which the assessee must have done and if the fact is not made known to the department, then only it can be said that there was suppression of material fact with intent to evade payment of duty. In this view of die matter we are of the view that longer period of limitation cannot be invoked in this case and the appeal is accordingly allowed. The penalty imposed is also unsustainable, and is set aside.