Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs Shree Ghanshyam Auto Parts Pvt. Ltd on 20 March, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.E/3517/04 (Arising out of Order-in-Appeal No.BPS(301)114/2004 dated 25/08/2004 passed by Commissioner of Central Excise & Customs (Appeals), Aurangabad) For approval and signature: Honble Mr. P.R. Chandrasekharan, Member (Technical) Honble Mr. Anil Choudhary, Member (Judicial) 1. Whether Press Reporters may be allowed to see :No 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 :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
Commissioner of Central Excise, Aurangabad Appellant Vs. Shree Ghanshyam Auto Parts Pvt. Ltd., Respondent Appearance:
Shri.Ahibaran, Addl. Comm. (AR) for appellant None for respondent CORAM:
Honble Mr. P.R.Chandrasekharan, Member (Technical) Honble Mr.Anil Choudhary, Member (Judicial) Date of Hearing : 20/03/2014 Date of Decision : 20/03/2014 ORDER NO Per: P.R.Chandrasekharan
1. Revenue is in appeal against Order-in-Appeal No.BPS(301)114/2004 dated 25/08/2004 passed by Commissioner of Central Excise & Customs (Appeals), Aurangabad.
2. Vide the impugned order, the learned lower appellate authority while upholding the contention of the Revenue that amortized cost of moulds and dies supplied free of cost by the buyer is includible in the assessable value of the goods manufactured and sold using the said moulds and dies, he has restricted the demand to the normal period of limitation and set aside the demands for the extended period and also the imposition of penalty on the appellant. The reason adduced for this reduction in demand is that the department was aware that the appellant was receiving moulds and dies free of charge from the buyer, as evident from the declaration filed by the appellant under Rule 173C (3A) of the Central Excise Rules, 1944 as it stood at the relevant time. Therefore, the appellate authority has held that extended period of time could not be invoked.
3. In the grounds of appeal, it has been urged that the declaration given under Rule 173C (3A) the CER, 1944 by the appellant does not give the full picture. In the said declaration, the appellant was also required to mention what was the impact of such free supply on the assessable value and this column has been left blank by the assessee and therefore, so the called declaration is incomplete. It is also argued that in respect of Seal Rear Pipes manufactured by the appellant and sold to the same to the buyer, the appellant had included the amortized cost of dies. Whereas in respect of Floor Board Assembly, the appellant failed to do the same. There is no explanation forthcoming why in respect of one item supplied they have followed the prescribed procedure whereas in respect of another item, the assessee failed to include the amortized cost of dies. Thus, there is an intention on the part of the assessee not to disclose the correct value information and discharge duty liability accordingly. Therefore, the invocation of extended period of time is justified, which fact the appellate authority has completely over looked.
4. The learned Additional Commissioner (AR) appearing for the Revenue reiterates the ground urged in the appeal memorandum.
5. None represented the appellant despite notice nor has any cross objection been filed. In these circumstances, as the issue pertains to the year 2004 and almost 10 years have passed, we take up the appeal for consideration and disposal.
6. We have perused the records and the statements tendered by the appellant during investigation. From the statement of Shri. BV Palaskar, Excise Officer of the appellant, it is evident that the assessee had been including the amortized cost of dies in the value of goods sold to the buyer M/s.Bajaj Auto Ltd. from 27/09/2000 onwards in respect of pipes which were manufactured and supplied. However, they did not include the amortized cost in respect of Floor Board Assembly, which were also manufactured and supplied to M/s.Bajaj Auto Ltd. The reason given for non-inclusion of the same is that they had not received the value of the said dies from M/s.Bajaj Auto Ltd. and they were unable to add the amortized cost of the said dies supplied by M/s.Bajaj Auto Ltd. in the value of the goods sold by them. In the said statement it has also been admitted that they had never informed the department about non-inclusion of the cost of the dies in respect of Floor Board assembly. Further, in response to a question as to whether they are willing to pay duty involved, it has been stated that they are willing to pay the duty provided no interest and penalty is imposed on them. In his statement dated 08/12/2003, the Managing Director of the assessee firm has confirmed the facts mentioned in Shri Palaskars statement and he has also assured that they would be willing to pay duty provided interest and penalty is waived as the mistake was unintentional. From these statements, it is evident that the assessee knew that they were required to include the amortized cost of dies in the value of the goods manufactured and sold to M/s.Bajaj Auto Ltd. The only reason for non-inclusion of the same is that they did not have the requisite information from M/s. Bajaj Auto Ltd. As per the provisions of Rule 173F of the Central Excise Rules, 1944 as it stood at the relevant point of time, the responsibility for assessing the duty correctly on the excisable goods intended to be removed was on the assessee himself. The same provisions were continued in Central Excise Rules, 2001 as also in Central Excise Rules, 2002, vide Rule 6 of the said Rules, which states that assessee himself shall assess the duty payable on the excisable goods. Thus, the responsibility for ascertaining the correct value and discharging duty liability was on the assessee. The assessee knew that they were required to include the amortized cost of dies. Therefore, the assessee cannot claim any advantage of time limitation. Further, under Rule 173C (3A) even though the appellant filed declaration, they did not give any details regarding cost of the dies supplied by the buyer, they only made a declaration that moulds have been supplied free of cost. The declaration mandates that the assessee has to indicate what would be the impact of the free supply on the value of the goods. The said column was left blank by the assessee without giving any information on this account.
6.1 In view of the above, the charge of deliberate non-declaration on the part of the assessee is clearly discernible. Therefore the lower appellate authority was wrong in coming to the conclusion that the extended period of time could not have been invoked in the present case. The Honble High Court of Gujarat in the case of CCE, Surat Vs. Neminath Fabrics Pvt. Ltd. 2010 (256) ELT 369 (Guj) held that knowledge of the department is totally irrelevant for the purpose of demand of duty, as the law does not stipulate awareness or knowledge on the part of the department for the purpose of computation of the relevant date for demand of duty. What has been prescribed under the statute is that upon the reasons stipulated under the proviso being satisfied, the period of limitation for service of show-cause notice under sub-section (1) of Section11A, stands extended to five years from the relevant date. The period of limitation cannot by reason of any decision of a Court or even by subordinate legislation be either curtailed or enhanced. It was further held that proviso cannot be read to mean that because there is knowledge, the suppression which stands established disappears. Similarly, the concept of reasonable period of limitation which is sought to be read into the provision by some of the orders of the Tribunal also cannot be permitted in law when the statute itself has provided for a fixed period of limitation. It is equally well settled that it is not open to the Court while reading a provision to either rewrite the period of limitation or curtail the prescribed period of limitation. This decision of the Honble High Court of Gujarat has also followed by the Larger Bench of this Tribunal in the case of Union Quality Plastic Ltd. Vs. CCE & ST, Vapi 2013 (294) ELT 222 (Tri-LB). The lower appellate authority has tried to bring the concept of knowledge of the department into the law which is not permitted. To that extent, the conclusion drawn by the lower appellate authority is clearly unsustainable in law. Therefore, the restriction of demand for the normal period of time by the lower appellate authority cannot be sustained and accordingly we set aside the order of the lower appellate authority and restore the order of the lower adjudicating authority as far as the invocation of extended period of time is concerned for confirmation of duty demand. Consequently, the appellant would also be liable to pay interest on the quantum of demand confirmed. However, considering the fact that the issue relates to interpretation of the provisions of law, imposition of penalty on the appellant is not warranted. Thus, the appeal of the Revenue is partly allowed in the above manner.
(Dictated in Court) (Anil Choudhary) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 7