Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Indian Card Board Industries Ltd. on 27 March, 1986
Equivalent citations: 1989(43)ELT75(TRI-DEL)
ORDER V.P. Gulati, Member (T)
1. These appeals are filed by the Collector, of Central Excise, Calcutta, against the orders of the Collector (Appeals) of Customs and Central Excise, Calcutta.
2. Brief facts of the case are that a show cause-cum-demand notice was issued to the respondents demanding duty of Rs. 1,47,493.21 for the period August 1981 to March 1982 and April 1982 to August 1982 under Section 11A of the Central Excises and Salt Act, 1944 for the reason that the respondents had realised more duty than actually paid by them to the Department and the assessable value was, therefore, enhanced by the amount of the duty collected in excess of the actual payment made by them. The Collector (Appeals), in his order, has held that the demand for the extended period beyond six months was not sustainable for the reason that there were no allegations that the short levy was for the reason of suppression of facts or mis-statement or mis-declaration with intent to evade payment of duty. He allowed the respondents' appeal accepting the plea that there was no suppression of facts or mis-statement and mis-declaration. In the ground of appeal, it has been stated that the respondents had not disclosed in the price-list, filed by them, the fact of realisation of excise duty in excess paid by them and, in view of this, it follows that they have been mis-declaring and suppressing facts, and provisions of Proviso to Section 11A(2) would apply. It has also been pleaded that the Collector (Appeals) Central Excise, Calcutta, has not advanced any cogent reason as to why the observation of the Assistant Collector for invoking five-year limitation was wrong. We find before the Collector (Appeals), the respondents had cited the case of Ganga Spinning Mills, reported in '1983 ELT 1674'. The learned SDR brought to our notice the price-list, which had been approved, and pleaded that the respondents did not show the element of duty which was abatable. We find that a certain price has been shown under Column 3 of the price-list and a discount of 7 1/2% has been allowed to be abated as indicated in Column 8 of the price-list. The figures arrived at after this abatement has been approved as assessable value. We find the entries made in various columns of the price-list had not been properly made and the departmental officers have approved the same without taking note of discrepancies. Under Column 3 what is required to shown is the price at which the goods are, ordinarily, sold in the course of whole trade and this should include the duty element also. Obviously, this has not been done and no figures have been shown regarding the duty element abated. The learned SCR conceded that the officers had approved the price-list which was not filed properly. He pleaded that inasmuch as the respondents failed to reveal correct facts, it has to be held that the respondents suppressed the facts and stated that there is mis-statement of facts involved with intent to evade payment of duty and, therefore, the extended period of limitation was available for raising the demand. He cited in this connection the case reported in '1985 ECR (35)'. The learned Counsel for the respondents, Shri N.C. Jain, pleaded that the respondent had filed a classification list which clearly showed that they would be availing the benefit of the Notification under which they paid lower rates of duty. It is borne out by the copy of the classification list placed before us. He further stated RT-12 had been filed by the respondents which had been assessed regularly. He stated that there was no allegation in the show cause notice regarding the suppression of facts, mis-declaration or mis-statement with an intent to evade payment of duty. He pleaded that the Assistant Collector, in his order, had gone beyond the show cause notice. He also pleaded that the respondents had no intention to defraud Government of the duty and the Collector (Appeals) had correctly accepted their plea of time-bar. He, however, conceded that, at no point of time, any document was filed by them or information revealed to the Department showing in any way that they were realising more duty then they were paying to the Department. He, however, drew our attention to the fact that the documents, filed under RT-12 return, can be verified by the Department if they so like and these documents had all the details. He further pleaded that the abatements had been legally, correctly made for arriving at the assessable value inasmuch as under the Finance Act, 1982 Clause 47, the explanation was added to Section 4(4)(d)(ii) and retrospective effect could not be given to this amendment in respect of the duty paid before the amendment of the Section.
3. He could not however formulate his arguments in this regard clearly as to how, when the limitation available under Rule 11A was there, the demands could not be raised. The following facts are not disputed :-
(i) price-list and classification lists had been approved by the proper officer;
(ii) price shown in the price-list was ex-duty and there was no indication of the duty abated from the wholesale price;
(iii) the respondents did not file with the Department the relevant time any documents showing that they were actually collecting more duty than they were paying to the Department; and
(iv) the respondents did not reveal the wholesale price being charged by them.
The Department's case, however, is that since the appellants did not disclose the relevant facts regarding the amount of wholesale price charged by them, including the duty and the abatement of duty actually taken therefrom, they had withheld the facts from the Department and, to that extent, they are guilty of mis-statement of facts as given in the price-list, with the intent to evade payment of duty. Now, if any charge is to be sustained in terms of certain provisions of the law, this should be spelt out first in the show cause notice so that the appellants get a chance to meet the charge levelled against them.
4. Adverting to the show cause notice issued in this case, we find that the show cause notice, as available in the record, (Annexures I and II appended), states -
"It is necessary for the purpose of appreciating the facts to reproduce show cause notice as it was issued in the instant case...."
We find in the opening paragraph of the show cause notice Section 11A(1) of the Central Excises and Salt Act has been invoked. Nowhere in the narration in the show cause notice, it has been alleged that the respondents had, for reason of fraud, collusion or any wilful misstatement or suppression of facts with an intent to evade payment of duty, mis-declared the value. We find from the facts on record that the appellants had not put forth full facts and the Department also, for the reasons best known to them, notwithstanding the fact that the information furnished by respondents was not as per the requirements set out in the price-list yet chose to approve the price-list filed by the respondents. Merely because the facts are not fully revealed, there can be no automatic inference that the appellants had made wilful misstatement or suppression of facts with the intent to evade payment of duty. We find that this Tribunal, in the case of Jay Engineering Works Limited, Calcutta v. Collector of Central Excise, Calcutta -1985 (21) ELT 299 (Tribunal), has held in regard to the invoking of proviso 11A :-
"There was neither allegation of fraud, collusion, wilful misstatement or suppression of facts nor any allegation of intent to evade payment of duty in the show cause notice. For invoking the longer time-limit of five years for demand of duty, it was not only necessary to allege but also to prove the ingredients aforesaid. Not having done so in the show cause notice, the invoking of five years' period for making the demand cannot be sustained."
The Department wants the respondents to be punished on the presumption that since the full facts were not revealed by them, the odium of suppression of facts with intent to evade payment of duty automatically gets attached to the respondents. No case has been made out before us in the grounds of appeal as to how, in the absence of any allegation regarding fraud, collusion, wilful misstatement or suppression of facts, etc., with the intent to evade payment of duty, the Assistant Collector's order can be sustained. We find in fact the respondents had revealed the fact that they were availing of the benefit of notification, and had been submitting RT-12 accordingly. We find the ratio of the judgment cited in '1985 (21) ELT 299' is applicable to the facts of this case. We, in the circumstances, find no reason to interfere with the order of the Collector (Appeals) and reject the appeal of the Department.
Sd/-
(V.P. Gulati)
Member (T)
New Delhi (S. Duggal)
Dated: 27-3-1986 Member (J)
I agree, but separate note appended, which would be part of this judgment.
Sd/-
(S. Duggal)
7-4-1986
S. Duggal, Member (J)
5. While I agree with the order proposed by my Learned Brother Shri V.P. Gulati, Member (Technical), I wish to add few observations on general principles. I have my reservations on the generality of the proposition as set out in the case of' Jay Engineering Works Limited, Calcutta' v. Collector of Central Excise, Calcutta -1985 (21) ELT 299 (Tribunal), because, in my view, it may not be essential in all cases to go by the bare wording of the show-cause notice as there could be cases where the import of necessary allegations such as wilful misstatement, suppression or fraud, 'with intent to evade duty', can be culled from facts as set out in the said notice, or attendant factors as brought on record otherwise.
6. In the present case, since a reading of the show-cause notices in two cases themselves indicates per se that the Department had been guilty of laches inasmuch as while the appellants disclosed the fact of payment of duty at the concessional rate under the said Central Excise Notification in RT-12 returns, the Department does not seem to have acted with due vigilance, by following the procedure of assessment of these returns every month, as prescribed by the rules. It is apparent from allegations in the notices that RT-12 returns were allowed to pile up for months, and were perused at a time by which the period of six months had expired in both the cases. It is true that the appellants ought to have also shown in the price-list the factum of actual duty paid so that assessable value could be determined accordingly, but the facts of this case reveal that they disclosed this fact every month in the RT-12 returns, and there is no allegation that RT-12 returns had not been filed regularly every month, as required. It is, thus, not possible in these circumstances to impute allegation of deliberate suppression, or wilful misstatement, 'with intent to evade duty' which it is necessary to show or establish to be able to invoke the larger period of five years under Proviso to Section 11A of the Central Excises and Salt Act, 1944.
7. In face of this, the show-cause notices in these two cases have been rightly held to be barred by time by the Appellate Collector as only normal period of six months was available to the Department, and thus the appeals are liable to be rejected. Both the appears are rejected accordingly.
Annexure-I (Refers to Para-4 of the Order) Office of the Suprintendent, Central Excise, Range XIV/V C.No. FE- 13(a)/XIV/V/82/987 dated 19-10-1982.
SHOW CAUSE-CUM-DEMAND NOTICE NO. 22/82 DATED 20-10-1982.
To The Indian Card Board Industries Ltd., 34/1A Bon Behari Bose Road, Ramkristopur, Howrah (L-4No.l2/Paper/67) Whereas it appears that the following duties have been short levied and whereas the said amount is recoverable from you under Section 11A(1) of Central Excises and Salt Act, 1944, you are hereby requested to show cause to the Assistant Collector, Central Excise, Calcutta XIV Divn. 25 Princep Street, Cal-72 why you should not be required to pay the said amount as determined by the Asstt. Collr. C. Ex. Cal. - XIV Divn. under Section 11A(2) of Central Excises and Salt Act, 1944.
1. Particulars of goods to Paper & Paper Board - T.C. 17(2) - cleared under CPIS which short levy relates and as per Annexure 'A'. particulars of the relevant clearance documents, if any -
2. Period to which short levy December 1980 to March 1981. relates
3. Amount of short levy:- Basic Special Cess Dec.'80 3423.40 171.15 28.53 Jan.'81 1483.43 74.15 7.72 Feb.'81 2482.32 124.11 12.41 Mar.'81 2547.93 127.39 12.70 _______ _______ ______ 9937.08 496.80 61.36
4. Grounds on which the aforementioned amount is proposed to be recovered :-
In course of assessment of monthly referee in form R.T. 12 for December, 1980 to March, 1981, it has been detected that the assessee cleared their products from their factory at a concessional rate of duty of 15% and 25% Adv.
under Notification No. 70/76-C.E., dated 16-3-1976 but they realised C. Ex. duty from their buyers @ 30% Adv. and thereby inflating the price declared by them and approved by the proper officer.
The said assessee is directed to produce at the time of showing cause all the evidence upon which they intend to rely in support of their defence.
The said assessee should also state at the time of showing cause whether they would like to be heard in person or through their legal representative before the case is adjudicated.
If no cause is shown against the action proposed to be taken within one month or do not appear before the Adjudicating Authority where the case is posted for hearing, the case will be decided on the basis of the records and documents available with the Deptt. without further reference to them.
If the assessee desires extension of time for showing cause, they should make a committee request to that effect to the Asstt. Collr. C. Ex. Cal. XIV Divn., within one month of receipt of this notice.
Sd/-
Superintendent Central Excise A/U No. 5, Cal. XIV Divn.Calcutta/ Annexure-II (Refers to Para-4 of the Order) Office of the Superintendent of Central Excise, Range-V/Cal. XIV 25, Princep Street, Calcutta-67.
CNo. FE-13(a)/XIV/V/83/525 dated 27-5-1983 SHOW CAUSE-CUM-DEMAND NOTICE NO. 9/83 dated 27-5-83 To M/s. East Coast Paper and Products (P) Ltd., Andul Road, Panchpara, Howrah. (L-4 No. 2/Paper/Cal-II/75)
Whereas it appears that the following duties and cess have been shortly levied and whereas the said amount is recoverable from you under Section HA(i) of Central Excise Rules, 1944, you are hereby requested to show cause to the Assistant Collector of Central Excise, Cal-XI V Divn. 25, Princep Street, Calcutta-72, why you should not be required to pay the said amount so determined to the Assistant Collector of Central Excise, Cal-XIV Divn. under Section 11A(2) of C.E. Rules, 1944.
(i) Period of which short levy:- April 82 to August 82.
(ii) Particulars of goods to which short-levy related and the particulars of statement of clearance documents, if any: - Paper & Paper Board under T. I. 17(2) cleared under GPI concerned during the above period.
(iii) Amount of short levy:- Rs. 49,258.05 (Rs. Forty-nine thousand two hundred fifty-eight and Paise Five only). Details as per Annexure 'A' attached with it.
(iv) Ground on which the afore-mentioned is proposed to be recovered :- In course of assessment of RT-12 for the month of April 82 to August 82, it has been detected that the Assessee cleared their products from their factory at a concessional rate of duty @ 32.5% and 40% Adv. (as applicable) Less 75% Granted under Govt. of India Notification No. 128/77, dated 18-6-1977 but they realised the Central Excise duty (Both Basic & Spl.) from the buyer at full Rate i.e. 32.5% and 40% Adv. (as it is evident from their relative sale-voucher etc.) and whereby did not pay duty on the amount realised in excess of the value cleared by them for the purpose of assessment of the Central Excise duty and cess as shown in the detail, in Appendix 'A' attached.
2. You should produce at the time of showing cause all the evidences you intend rely in support of your defence.
3. You should also indicate in the written explanation whether you wish to be heard in person before the case is adjudicated.
4. If no cause is shown against the action proposed to be taken within one month of the receipt of this notice or you do not appear before the Assistant Collector of C.E. Cal-XIV Dvn. where the case is posted for hearing, the case will be decided in accordance with the provision of Section 11A(2) of C.E. and Salt Act, 1944, without making any further reference to you. If you desire extension of time for snowing causes, you should make written request to that effect to the Assistant Collector of C.Ex. Cal-XIV Divn. within one month of receipt of this notice giving reasons for the extension requested for.