2009 (6) TMI 721 - AT - Central Excise

Duty demand upheld for deliberate non-disclosure of branded products under Central Excise Rules

TARA SNACKS & FOOD PVT. LTD. Versus COMMR. OF C. EX., LUCKNOW

The Court upheld the duty demand, interest, and penalty under the Central Excise Rules, 2002, finding that there was deliberate suppression of facts ... Stay/Dispensation of pre-deposit - Demand - Limitation Issues Involved:Suppression of facts in relation to the production of branded products leading to duty demand, interest, and penalty under Central Excise Rules, 2002.Analysis:1. The appellant challenged the impugned order, arguing that there was no intentional suppression of facts regarding the production of branded products. The appellant claimed that they had informed the department in advance about their intention to produce branded products. The appellant cited Supreme Court decisions to support their contention that there was no deliberate suppression. Additionally, the appellant argued that the quarterly return did not require specific mention of the branded product.2. The Departmental Representative (DR) highlighted that the necessary information about the production of branded products should have been disclosed as per the quarterly return instructions. The DR contended that since the factory was in a notified area, the branded product could not enjoy the exemption.3. The authorities found suppression of facts regarding the clearance of branded products, leading to the confirmation of duty demand, interest, and penalty under the impugned order. The quarterly returns did not mention the manufacturing of branded products, even though the appellant had informed the department in advance. The appellant did not seek exemption as required by Notification No. 8/2003.4. The Apex Court's interpretation of 'suppression' under Section 11A of the Central Excise Act, 1944 was discussed. The Court emphasized that suppression entails deliberate non-disclosure with the intent to evade duty. Mere incorrect statements are not sufficient to prove suppression unless made willfully to avoid duty payment.5. The Apex Court's rulings in various cases were cited to emphasize that deliberate withholding of information is necessary to invoke the extended period of limitation. The failure to disclose the production of branded products in the quarterly returns was considered a conscious withholding of required information, justifying the duty demand.6. The Court differentiated between intentional suppression and unintentional errors in reporting. The appellant's failure to disclose the production of branded products in the quarterly returns was deemed a deliberate act, as they were aware that the product did not qualify for exemption due to the factory's location in a notified area.7. The Court rejected the appellant's argument that there was uncertainty in the law regarding disclosure of exempted goods. It was emphasized that once it was clear that the branded products were not exempted in the notified area, the obligation to disclose such production was evident.8. The Court denied the appellant's request for a stay on the impugned order, stating that mere claims of financial hardship were insufficient. The appellant was directed to deposit the demanded amount within a specified timeframe, considering the Revenue's interest in the matter.This detailed analysis of the judgment highlights the key arguments, legal interpretations, and conclusions reached by the Appellate Tribunal in relation to the issues of suppression of facts and duty demand concerning the production of branded products under the Central Excise Rules, 2002.