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of <h1>Clearance of packing materials as scrap mis-declaration led to dismissal of appeal and duty demand sustained</h1> Clearance of packing materials declared as 'scrap' was treated as mis-declaration and suppression alleged to evade duty; the extended limitation period ... Clearance of packing materials as 'scrap' - mis-declaration and suppression with intent to evade duty - invocation of extended period of limitation - burden of proof on the claimant/assessee - conditional notifications and requirement of prior permission under Board circular - Notification No.52/2003-Cus - 22/2003-CE - Board's Circular F.No.305/68/86-FTT dated 15.07.1986 - HELD THAT:- We find that the period is from October 2009 to May 2014 for which SCN dt. 03.11.2014 was issued under Section 28 (4) of the Customs Act, 1962 and the allegation in the SCN is that they have also suppressed the fact of clearance of packing material as such in the guise of ‘scrap’ and mis-declared the same as ‘other organic compounds’ but however, nothing was brought on record establishing the fact of suppression with an intention to evade payment of duty. From a perusal of the pleadings advanced by the Appellant both before the lower authorities as well as before us, it is their case that the mention of CETH (as 29420090) was by mistake in their returns since the above classification was for their final product. However, the Department would normally go by the returns (E.R.2) filed which is the foundation and hence, it is not expected of an Assessee to declare something and claim bonafides, because going by the very such returns, the Department would start the proceedings as prescribed under the statute, if required. It may be therefore that such declaration is by taking a chance that the Department might accept which would ultimately result in loss to the exchequer. Hence, we do not agree with the contentions of the Appellant that there was no suppression as according to us, the same was very much evident from their own returns which lead or mislead the Department into initiating the proceedings which has resulted in demand of lawful duty. Thus, we do not find any merit in the Appeal and hence, we dismiss the same. Issues: (i) Whether the Revenue proved that the clearances by the appellant were not non-reusable packing-scrap but liable to duty; (ii) Whether invocation of the extended period of limitation is justified.Issue (i): Whether the clearances were scrap or reusable packing material liable to customs duty.Analysis: The notification and circular relied upon by the appellant are conditional and require compliance with safeguards and prior permission. The returns (ER-2) filed by the appellant declared the CTH inconsistent with the declared description and formed the basis for departmental proceedings. The appellant did not establish, with admissible evidence, compliance with the conditions set out in the circular or that the materials were non-reusable scrap; statements and documentary material were considered in light of the conditional nature of the concession and the claimant's burden to prove entitlement.Conclusion: In favour of Revenue.Issue (ii): Whether the extended period of limitation could be invoked.Analysis: The SCN alleged suppression and mis-declaration in returns over the relevant period. Given the returns filed and the Tribunal's finding that suppression was evident from those returns, the requirement for invoking extended limitation was satisfied on the material before the authority.Conclusion: In favour of Revenue.Final Conclusion: The appellate challenge fails on both issues and the appeal is dismissed; the departmental demand and penalty as confirmed below stand upheld for adjudication/quantification as directed by the lower forum.Ratio Decidendi: Where a fiscal concession is conditional, the claimant bears the burden of proving compliance with the conditions including prior permissions; absent such evidence and where returns indicate mis-declaration or suppression, the Revenue is entitled to invoke extended limitation and confirm duty demand.
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