1999 (12) TMI 532

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....M/s. R.H. Industries is the manufacturer of Axle Beam Assembly which is a component part of Tractors manufactured by Punjab Tractors Ltd. While carrying out this job work of manufacturing Axle Beam Assembly they did not include the value of the Axle Beam Bushes supplied free of cost by Punjab Tractors Ltd. Therefore, on the allegation that appellant wilfully suppressed the value of Axle Beam Bushes while paying duty on the Axle Beam Assembly, show cause notice dated 1-2-1995 was issued calling upon the appellant why sum of Rs. 3,16,913.05 should not be realised as the amount of duty evaded for the period from November, 1990 to July, 1995. Appellant herein objected to the show cause notice on many counts including the plea of limitation. The....

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....ction 11A of the Central Excise Act, 1944, Department should not only show that there was short levy on account of fraud, pollution, mis-statement or suppression, it must also be shown that said fraud, pollution, mis-statement or suppression must have been made with intent to evade payment of duty. In the instant case even if it is shown that there was a short payment of duty, there could not have been any wilful mis-statement with intent to evade payment of duty. In the absence of wilful mis-statement with intent to evade payment of duty the Department cannot, it is argued, invoke the Proviso to Section 11A. In support of this argument ld. Counsel submits that even if the price of the bushes supplied by Punjab Tractors was included in the ....

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....h a situation the Punjab Tractors could have claimed Modvat Credit, the result would have been Revenue neutral. There could not have been any loss to the Revenue. When the value of the Bushes were not included in the value of Axle Beam Assembly, there could not have been any intention on the part of R.H. Industries to evade payment of duty. Consequently, Department was clearly in error in invoking the extended period fixed by the Proviso to Section 11A. 6. As stated earlier the show cause notice was of dated 1-12-1995. The period covered by that notice was from November, 1990 to July, 1995. Ld. Counsel representing the appellant rightly and fairly conceded before us that the said notice could be valid for 6 months immediately procee....