Customs, Excise and Gold Tribunal - Delhi
Agrico Engg. Works (India) Pvt. Ltd. vs Commr. Of C. Ex. on 10 October, 2000
Equivalent citations: 2000(122)ELT891(TRI-DEL)
ORDER S.S. Kang, Member (J)
1. The appellants filed this appeal against the Order-in-Original dated 12.08.96 passed by the Commissioner of Central Excise.
2. Brief facts of the case are that appellants are engaged in the manufacture of parts of tractors and parts of printing machine and were availing the benefit of Notification No. 175/86-C.E. dated 01.03.1986. A show cause notice was issued to the appellants on the ground that they were clearing the parts with the brand name of Escorts and M/s. Bandhu Machinery Pvt. Ltd., therefore, they are not entitled for the benefit of Small Scale Exemption Notification and duty was demanded by invoking the provisions of Section 11A of the Central Excise Act on the ground that the appellants suppressed the facts for manufacturing the goods with the brand name of others. The adjudicating authority held that the appellants were not entitled for the benefit of Notification No. 175/86-C.E. dated 01.03.1986 and confirmed the demand under Section 11A of the Central Excise Act. Appellants filed appeal before the Tribunal and the Tribunal vide Final Order No. E/271/94-B1, dated 13.05.1994 upheld the finding of the adjudicating authority in respect of benefit of Notification No. 175/86-C.E. dated 01.03.1986 and remanded the matter to the adjudicating authority pertaining to extension of large period under Section 11A of the Central Excise Act. Now, vide impugned order the adjudicating authority held that as appellants suppressed the correct facts, the extended period under Rule 9(2) of Central Excise Rules read with provisions of Section 11A of the Central Excise Act are invokable.
4. Learned Counsel appearing on behalf of the appellants submits that there is no act of commission or omission for alleged short levy. He submits that appellants as well as Revenue were under the bona fide impression with embossing of 'ESCORT' and 'BM' not deprives appellants for availing the benefit of exemption in terms of Notification No. 175/86-C.E. dated 01.03.1986. He submits that the appellants filed the classification list effecting from 01.04.1987 and in the classification list the appellant specifically mentioned that they were availing the benefit of Notification No. 175/86-C.E. dated 01.03.1986 and the classification list was duly approved by the competent authority. He submits that granting approval of classification list is not a routine matter. He submits that when the Revenue was put to notice that appellants were availing the benefit of Small Scale Exemption Notification. Hence the appellants had no intention to keep anything away from the Revenue. He submits that the goods in question were embossed with the markings of 'ESCORT' as well as 'BM' of the size of about 6" x 2" and size of the parts in question are in 2' and these markings were quite visible with the naked eyes. He submits as the parts in question manufactured by the appellants were lying scattered in the factory premises and were also placed in the office for demonstrations, sale and exhibition for the customers, the Revenue cannot now say that they were not aware of the fact that appellants ware clearing goods with the brand name of others. The Revenue officers visited the factory of the appellants on various occasions and they have seen the parts manufactured by the appellants with the marking of ESCORTS and B.M. Therefore, suppression cannot be alleged against the appellants. He submits that the provisions of Section 11A of the Central Excise Act can be invoked in the case of fraud or collusion or any wilful mis-statement or suppression with intent to evade payment of duty. Submissions of the learned Counsel is that in the case of fraud it must be established beyond reasonable doubts and it cannot be based on suspicion. For this, he relied upon the decisions of Privy Council in the case of A.L.N. Narayanan Chettyar and Anr. v. official Assignee, High Court Rangoon, reported in (23) A.I.R. 1941 Privy Council 93. Learned Counsel also submits that this decision was followed by the Hon'ble Supreme Court in the case of Svenska Handelsbanken v. M/s. Indian Charge Chrome and Ors., reported in (1994) 1 Supreme Court cases 502.
5. Learned Counsel further submits that there is no evidence on record to show that the appellants have committed any act of omission to see that those embosses were not visible to the authority or anything was done with the intent to evade the payment of duty. Therefore, in absence of any evidence that appellants wilfully suppressed any fact, the provisions of Section 11A of the Central Excise Act cannot be invoked. For this he relied upon the decision of the Hon'ble Supreme Court in the case of Collector of Central Excise v. Chemphar Drugs and Liniments, reported in 1989 (40) E.L.T. 276 (S.C.) and in the case of Padmini Products v. Collector of Central Excise, reported in 1989 (43) E.L.T. 195 (S.C.). Learned Counsel further submits that in some of the Gate passes the fact of embossing was specifically referred. Hence, the Revenue was aware of the fact that appellants were clearing the goods with the embossing of 'BM' and 'ESCORT'. He, therefore, prays that the appeal be allowed.
6. Learned Senior Departmental Representative appearing on behalf of the Revenue submits that the issue in the present case is that whether the appellants suppressed the facts in respect of clearing the goods with the brand name of 'ESCORT' and 'BM' of another persons name M/s. Escorts Ltd. and M/s. Bandhu Machinery Pvt. Ltd. who were not entitled for the exemption under Notification No. 175/86-C.E. dated 01.03.1986. He submits that the appellants never disclosed this fact to the Revenue. The appellants filed the classification list mentioning therein that they were availing the benefit of Notification No. 175/86-C.E. dated 01.03.1986. In the classification list there is no mention of the fact that they were manufacturing the goods with the trade name of others. In absence of this information, the classification list was duly approved. He submits that if appellants in the classification list mentioned the fact that they were clearing goods with the brand name of others and the same was approved, then the appellants can say that Revenue was aware of the facts that they were clearing the goods with the trade mark of others.
7. He submits that as the appellants were availing the benefit of Small Scale Exemption Notification, therefore, they cannot plead that they were not aware of the conditions of the notification. In respect of G.P. Is, he submits that in the gate passes in the column of identification mark, the appellants were writing the word `BM'. He submits that the appellants were not mentioned that the goods were embossed with the trade mark of "BM". His contention is that identification marks in the gate passes cannot be construed as sufficient knowledge on the part of the Revenue. He, therefore, prays that the appeal be dismissed.
8. Heard both sides.
9. In this case a show cause notice was issued to the appellants on the ground that they had suppressed the fact that they were clearing the goods with brand name of `ESCORT' and 'BM' belonging to M/s. Escorts Ltd. and M/s. Bandhu Machinery Pvt. Ltd. who were not eligible under the Small Scale Exemption Notification. The contention of the appellants is that the Revenue was aware of the fact that they were clearing the goods with the brand name of others. Therefore, the provisions of Section 11A cannot be invoked.
10. The appellants filed classification list where they claimed the benefit of Notification No. 175/86-C.E., dated 01.03.1986. In the classification list, the appellants never disclosed the fact that they were clearing the goods with the brand name of others. In absence of this information the classification lists were approved as such. Therefore, the plea of the appellants is that the classification list approved, therefore, suppression cannot be alleged has no merit.
11. The contention of the appellants is also that the goods were marked with 'BM' and 'ESCORT' with bold letters and which were visible with the naked eyes and the officers of the Revenue visited the factory at various times. Therefore, suppression cannot be alleged. There is nothing on record to show that appellants ever disclosed the fact of clearing the goods with the trade marks of others to the Revenue. Therefore, in absence of this evidence, the assessee cannot argue that Revenue was aware of this fact. The purpose of visit of Excise officers was limited and there is nothing on record to show that ever Revenue authority pointed out this fact to the appellants and even after the discovery of this fact, the Revenue has not taken any action.
12. The reliance of the appellants on the decisions of Privy Council in the case of A.L.N. Narayanan Chettyar and Anr. v. official Assignee, High Court Rangoon, reported in (28) A.I.R. 1941 Privy Council 93 and Hon'ble Supreme Court in the case of Svenska Handelsbanken v. Indian Charge Chrome and Ors., reported in (1994) 1 Supreme Court cases 502, where it is held that in the case of fraud it must be established beyond reasonable doubts are not helpful to the appellants as there is no allegation of fraud in the present case. The appellants also relied upon the decisions of the Hon'ble Supreme Court in the case of Collector of Central Excise v. Chemphar Drugs and Liniments, reported in 1989 (40) E.L.T. 276 (S.C.) and Padmini Products v. Collector of Central Excise, reported in (Supra) where it is held that mere failure or negligence on the part of the manufacturer either not to take a licence or not to pay duty in case where there was scope of doubt does not attract extended limitation. In the case of Padmini Products (Supra), the Hon'ble Supreme Court held that there is no evidence that the manufacturer knew that the goods were liable to duty and he was required to take a licence hence the extended period of limitation cannot be invoked. In the present case the appellants were availing the benefit of Notification No. 175/86-C.E. dated 01.03.1986 and as per Para-7 of the notification, the manufacturer is not entitled for the benefit of Small Scale Exemption Notification, if, he cleared the goods with the brand name of others who are not eligible for the grant of exemption. As the appellants were availing the benefit of this notification, they cannot say that they were not aware to the conditions of this notification. Therefore, the contention of the appellants is that there was doubt in the minds of appellants as well as in the minds of Revenue in respect of availability of exemption has no merit.
13. The appellants also contended in some of the GPIs that they were mentioning the words `ESCORT' and 'BM' under Column 'Identification mark'. The appellants merely written the word 'BM' and 'ESCORT' without any explanation to the fact that the goods were embossed with the trade mark of others. The stray cases of these gate passes where they have mentioned the word 'BM' and 'ESCORT in identification column without any explanation will also not be helpful to the appellants. In view of the above discussions, we find no merit in the appeal. The same is rejected.