TaxTMI 
TaxTMI 
2009 (8) TMI 908
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....t the order dated 16th December, 2003 of the Additional Commissioner, Bhopal. By the said order, the Additional Commissioner had confirmed the demand of excise duty amounting to Rs. 3,88,641/- under Section 11A of the Central Excise Act, 1944 and has also ordered payment of interest under Section 11AB of the said Act. A penalty of equal amount of the duty was also imposed under Section 11AC of the said Act. During the pendency of this appeal in the stay application filed by the appellants, the Tribunal had allowed the appellant to contest the proceedings on deposit of Rs. l lakh vide its order dated 6th December, 2004. In the meanwhile, however, the appellants paid the entire duty amount on 31st January, 2006. The duty amount relates to the....
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....e, the manufacture clearly attracted the duty liability which was required to be cleared by the appellants. However, the appellants neither paid duty nor disclosed the fact of manufacture of such tanks for their supply thereof to IOCL in the regular returns filed by the appellants. It was only pursuant to the intelligence gathered by the Department and from the letter dated 4-6-2002 that the fact of manufacture of such storage tanks by the appellants for the supply thereof to the IOCL was revealed to the Department. It is therefore, their case that pursuant to the disclosure by the appellants on 23rd and 20th December, 2002 of all the facts regarding manufacture of such storage tanks by the appellants for supply thereof to IOCL were reveale....
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....the duty liability cannot be upon IOCL in relation to the manufacture of storage tanks by them and supplied to IOCL. They have cleared all the duty liability on 31st January, 2006. This conduct, according to the learned Advocate, discloses that there was no intention to evade duty as such. Further, regarding the nature of the work contract between the appellants and the IOCL, the learned Advocate submitted that the same disclosed complete supervision of IOCL in relation to manufacture apart from supply of the basic raw materials by IOCL to the appellants. He also submitted that though the appellants were manufacturing similar storage tanks for other parties in respect of which the appellants had paid duty, they had no reason to evade duty i....
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....ence of liability of excise duty in relation to storage tanks manufactured by the appellants for supply thereof to M/s. IOCL during the period from October, 1998 to March, 2002. It is a matter of record that the appellants though had manufactured similar tanks for other parties, the appellants did not entertain any such belief about absence of duty liability in relation to the manufacture of those tanks and indeed paid duty in respect thereof. In other words, in relation to the storage tanks of the nature which were supplied to IOCL, the appellants were fully aware that they were subject to duty liability and also about the fact that the manufacture thereof was by the appellants. Obviously, therefore, it was within the knowledge of the appe....
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.... such tanks. It is not the case of the appellants that on manufacture of tanks, the entire expenditure thereof was financed by IOCL or has been directly spent by IOCL. Similarly, merely because there was income-tax clearance certificate or any registration certificate that itself would not be sufficient to construe the nature of work carried out by the appellants in relation to manufacture of storage tanks to be in the nature of supply of labour services. Being so, as rightly pointed out on behalf of the respondent on finding about the manufacture of storage tanks by the appellants for IOCL failure to clear the duty liability in that regard cannot be held to be bona fide. 8. The contention that non-availment of Cenvat credit would disclo....
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....rior to 31-1-2006 and were under the impression that they would not be subjected to the above liability and under that genuine belief did not bother to seek or obtain any legal advice till then. The party did not make any attempt to appraise itself of the correct situation of law cannot be a ground to say that they did not know that they were liable to pay the duty or to contend that the belief was genuine and bona fide. It was necessary for the appellants to appraise themselves of the correct position in law in relation to their duty liability. Merely on fanciful imagination the assessee was not entitled to assume that he had no liability to pay the duty. In the matter in hand, admittedly, the appellants were paying duty in relation to sim....