Custom, Excise & Service Tax Tribunal
M/S. Malwa Cotton Spg. Mills vs Cce, Ludhiana on 24 September, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Excise Appeal No.1461 of 2007-SM (BR)
[Arising out of Order-in-Appeal No.25/CE/LDH/2007 dated 26.02.2007 passed by the Commissioner of Central Excise (Appeals), Chandigarh]
Date of Hearing/ Decision:24.09.2009
For approval and signature:
Hon'ble Mr. P.K. Das, Member (Judicial)
,,,
1. Whether Press Reporters may be allowed to see
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 the Order?
4. Whether Order is to be circulated to the Departmental :
authorities?
M/s. Malwa Cotton Spg. Mills Appellants
(Rep. by Shri Hemant Bajaj, Advocate)
Vs.
CCE, Ludhiana .Respondents
(Rep. by Shri S.R. Meena, SDR) CORAM: Honble Mr. P.K. Das, Member (Judicial) Order No/Dated:24.09.2009 Per P.K. Das:
The relevant facts of the case as per records, in brief, are that the appellants had taken Cenvat credit of Rs.2,05,386/- in their Cenvat account vide Entry dated 7.5.2003 on the basis of final assessment by the jurisdictional Asstt. Commissioner. A show cause notice dated 28.11.2005 was issued for recovery of the said amount as they have taken suo moto credit without following the prescribed procedure under Section 11-B of the Central Excise Act, 1944. The Original Authority confirmed the demand of Rs.2,05,386/- and imposed penalty of equal amount along with interest. The Commissioner (Appeals) upheld the adjudication order.
2. Ld. Advocate on behalf of the appellant submits that during the relevant period, there was a series of decisions of the Tribunal that the assessee is eligible to take suo moto credit in their Cenvat Account. He fairly submits that the issue has been decided by the Larger Bench of the Tribunal in the case of BDH Industries Ltd. Vs. CCE (Appeals), Mumbai reported in 2008 (229) ELT 364 (Tribunal-LB), wherein it has been held that no suo moto refund/credit of the duty can be taken without filing refund/application under Section 11 B of the Act. He submits that the demand is barred by limitation. The suo moto credit was taken in their Cenvat Account. There is no suppression of facts with intent to evade payment of duty. He submits that there is contrary decisions of the Tribunal and, therefore, it cannot be said that the appellants had suppressed the facts with intent to evade payment of duty and extended period of limitation cannot be invoked.
3. Ld. DR on behalf of the Revenue reiterates the findings of the Commissioner (Appeals). He submits that the appellants merely taken credit in their Cenvat account without reflecting in the monthly return, which was detected by the Audit party during verification of the records. Thus, it is a clear case of suppression of facts with intent to evade payment of duty and extended period of limitation is applicable.
4. After hearing both the sides and on perusal of the records, I find that the ld. Advocate fairly concedes that the issue is covered by the decision of the Larger Bench of the Tribunal, which is against the appellant on merit. It is seen that there is contrary views of the Tribunal on the issue as to whether that the assessee would eligible to avail suo moto credit of the amounts of duty paid in excess by them. The issue has been decided by the Larger Bench of the Tribunal in the case of BDH Industries Ltd. (supra) holding that all types of refunds have to be allowed under the Central Excise Rules made thereunder and no suo moto credit of the duty paid in excess may be taken by the assessee. Thus, the Honble Supreme Court in the case of Continental Foundation Jt. Venture Vs. CCE, Chandigarh-I reported in 2007 (216) ELT 177 (SC) held as under:-
10.The expression suppression has been used in the proviso to Section 11A of the Act accompanied by very strong words as fraud or collusion and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct.
11.Factual position goes to show the Revenue relied on the circular dated 23-5-1997 and dated 19-12-1997. The circular dated 6-1-1998 is the one on which appellant places reliance. Undisputedly, CEGAT in Continental Foundation Joint Venture case (supra) was held to be not correct in a subsequent larger Bench judgment. It is, therefore, clear that there was scope for entertaining doubt about the view to be taken. The Tribunal apparently has not considered these aspects correctly. Contrary to the factual position, the CEGAT has held that no plea was taken about there being no intention to evade payment of duty as the same was to be reimbursed by the buyer. In fact such a plea was clearly taken. The factual scenario clearly goes to show that there was scope for entertaining doubt, and taking a particular stand which rules out application of Section 11A of the Act.
12.As far as fraud and collusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word wilful, preceding the words mis-statement or suppression of facts which means with intent to evade duty. The next set of words contravention of any of the provisions of this Act or Rules are again qualified by the immediately following words with intent to evade payment of duty. Therefore, there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful.
5. In the present case, the appellants availed the suo moto credit and duly recorded in their Cenvat Account. It is seen that there is a doubt regarding admissibility of the suo moto credit, which was settled by the Larger Bench of the Tribunal. Thus, there cannot be suppression of the facts with intent to evade payment of duty. Hence, the demand of duty and penalty are set aside on the ground of limitation. The impugned order is set aside. The appeal is allowed with consequential relief.
Order dictated & pronounced in open court on 24.09.2009.
( P.K. Das ) Member (Judicial) Ckp.