Custom, Excise & Service Tax Tribunal
Cce, Delhi-Iii, Gurgaon vs M/S.Bhalla Chemical Works Pvt. Ltd on 29 September, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-SM
COURT IV
Excise Appeal No.E/1569/2009 EX. [SM]
[Arising out of Order-in-Appeal No.64-65/ANS/GGN/2009 dated 03.03.2009 passed by the Commissioner of Central Excise (Appeals), Delhi-III, Gurgaon]
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
1
Whether Press Reporters may be allowed to see 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 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?
CCE, Delhi-III, Gurgaon Appellant
Vs.
M/s.Bhalla Chemical Works Pvt. Ltd. Respondent
Present for the Appellant : Mrs.Kanu Verma Kumar, DR
Present for the Respondent: Mr. Alok Yadav, Advocate
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing/Decision: 29.09.2015
FINAL ORDER NO. 54045/2015
PER: S.K. MOHANTY
The Revenue has filed this appeal against the impugned order dated 03.03.2009 wherein the Commissioner (Appeals), Central Excise, Delhi has set aside the duty and penalty amount confirmed in the Adjudication order dated 15.02.2008 on the ground of limitation. For allowing the appeal of the respondent, the ld. Commissioner (Appeals) has relied on the judgment of Honble Supreme Court in the case of Primella Sanitary Products vs.CCE reported in 2005 (184) ELT 117 (SC) and Oudh Sugar Mills vs. CCE reported in 1999 108 ELT 779.
2. Mrs. Kannu Verma Kumar, the ld. DR appearing for the appellant reiterates the submissions made in the grounds of appeal and relies on the following judgments to support the stand of Revenue that dropping of demand on the ground of limitation is not in conformity with the statutory mandates.
1. Union of India vs. Dharamendra Textile Processors reported in 2008 (231) ELT 3 (SC)
2. Madras Petro-chem Ltd. vs. Collector of Central Excise, Madras reported in 1999 (108) ELT 611 (SC)
3. Commissioner of Central Excise Ghaziabad vs. Rathi Steel and Power Ltd. reported in 2015 (321) ELT 200 (All.) and
4. Alaska Tyres (P) Ltd. vs. Commissioner of Central Excise, New Delhi reported in 2002 (145) ELT 329 (Tri.-Del.)
4. Per contra, Shri Alok Yadav, the ld. Counsel appearing for the respondent submits that the fact of generation of unwanted material, namely, product i.e. waste alkaline water during the course of manufacture of Zirconium Carbonate and Zirconium Oxide was known to the Department way-back in 1993 through filing of the classification list by the respondent and also through the intimation letter dated 18.02.2003 & 18.09.2004, addressed by the respondent to the Jurisdictional Range Superintendent. It is his submission that since the facts regarding generation of the waste product in the factory of the respondent and removal of the same from the factory was known to the Department in 2003 and the show cause notice was issued on 07.08.2007, the same is clearly barred by limitation of time. According to the ld. Advocate, the extended period of limitation contained in the proviso to section 11A of the Act cannot be invoked in absence of any substantiation regarding the involvement of the appellant in the activities, concerning suppression, misstatement, collusion, fraud etc, with intent to evade payment of Central Excise Duty. To substantiate his above stand, the ld. Advocate has relied on the judgment of Honble Supreme Court in the case of Pushpam Pharmaceuticals vs. Commissioner of Central Excise - 1995 (78) ELT 401-SC
5. I have heard the ld. Counsel for both sides and perused the records.
6. The short question involved in this appeal for consideration by this Tribunal, is as to whether, the Commissioner (Appeals) is justified in setting aside the adjudication order and dropping the duty demand on the ground that extended period of limitation cannot be invoked in the circumstances of the present case.
7. Recovery of duties not levied or not paid or short levied or short paid or erroneously refunded is contained in Section 11A of the Central Excise Act, 1944. Main Clause of Section 11A Provides that the show cause Notice has to be issued within one year from the relevant date, seeking recovery of the duty amount. The proviso appended to Section 11A (1) specifies that where the duty of excise has not been levied or paid by reason of fraud, collusion or any wilful misstatement or suppression of fact or contravention of any of the provisions of the Act with intent to evade payment of duty, instead of the period of one year, the show cause notice can be issued by invoking the extended period of limitation of 5 years.
8. For resolving the present dispute, the letter dated 18.02.2003 addressed by the respondent to the Jurisdictional Range Superintendent is very crucial, which is extracted below:-
Dated 18.2.2003 The Superintendent Central Excise Range XIV, Udyog Vihar, Vanijya Nikunj Phase V Gurgaon Sub:- Central Excise Registration Form Dear Sir, We have submitted application form for Central Excise Registration on 29.1.2003. However, we wish to bring to your kind notice that we have two waste products i.e. waster silica and waste alkaline water. These waste materials are not allowed to be stored because of pollution norms and are disposed as per state laws. This is for your information. Thanking you, Yours faithfully, For BHALLA CHEMICAL WORKS PVT. LTD. (UNIT.II) (MANAGING DIRECTOR)
9. A perusal of the letter extracted above would reveal that the appellant had no intension in suppressing the facts from the Department with the motive of defrauding the Government Revenue. The said fact is evident from the letter itself, wherein the respondent had specifically mentioned while applying for the registration that the waste alkaline water were also generated during he course of manufacture of the final product, which cannot be stored because of pollution control norms and are disposed of as per mandates of the statute framed by the Government. Since the appellant in very categorical terms has intimated the Department regarding generation of the waste material and disposal of the same from the factory premises, the allegations levelled in the show cause notice and the duty demand confirmed in the adjudication order by invoking the extended period of limitation is not proper and justified.
10. I find that the Honble Supreme Court in the case of Pushpam Pharmaceuticals (supra) have held that when the facts are known to the Department, extended period of limitation cannot be invoked, justifying confirmation of the duty demand. The judgments/decisions cited by the ld. D.R. for Revenue are distinguishable from the facts of the present case, in asmuch as, the issues decided in those cases relate to imposition of mandatory penalty under section 11AC of the Act and non-maintenance of statutory records with intent to evade payment of duty; whereas, contrary is the situation in the present case, where the issue confines to the time limit, within which the SCN has to be issued, whether it should be within one year from the date of knowledge of the Department regarding the activities of the assessee or five years from such date. It is an admitted fact on record that the activities of the respondent were known to the Department in the month of September, 2004 and thereafter the SCN was issued on 07.08.2007, which is beyond the normal period of one year from such relevant date. Therefore, I am of the considered opinion that the proceedings initiated for confirmation of the demand is barred by limitation of time.
11. In view of above, I do not find any infirmity in the impugned order passed by the Commissioner (Appeals) and thus, dismiss the appeal filed by Revenue.
(Dictated and pronounced in the open Court) (S.K. MOHANTY) MEMBER (JUDICIAL) Anita ??
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