TaxTMI 
TaxTMI 
2009 (10) TMI 810
X X X X Extracts X X X X
X X X X Extracts X X X X
....C, Khopoli Dn., to get debonded and exit from the scheme, vide their letter dated 20-8-2003. As per the directions of the A.C., they paid the Excise and Customs duties in respect of the quantity of raw material, such as cotton yarn and consumables etc. contained in the finished goods lying with them in stock, as on 1-9-2003, along with duty involved in capital goods. 2. Later, from the state of Stock of Work in Progress (W.I.P) submitted to the Dena Bank for the month of August, 2003, the preventive staff, Khopoli Dn. on 20-9-06, detected that the respondents had not paid the duty in respect of the raw material contained in the said W.I.P. stock. Shri Subhash Chandra Panda, the overall in charge of the factory of the respondents, in his ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sal of the same, imposed penalty under Section 11AC and charged the interest under Section 11AB of the Central Excise Act, 1944. Aggrieved, the respondents preferred an appeal before the Commissioner (Appeals). The Commissioner (Appeals), vide Order-in-Appeal No. SRK/208/RGD/2008 dated 21-4-2008, allowed the appeal, setting aside the Order-in-Original. 4. The Revenue in its 'Grounds of Appeal' has contended as under : (i) The Commissioner (Appeals) erred in concluding that the respondents were not required to declare to the Department, the stock of WIP; and that there was no positive act of suppression on the part of the respondents because - (a) it is the legal duty of the respondents to declare the full stock of the raw mat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s raw materials lying in stock although obtained by the Department from the balance sheet, a document open to public, theory of universal knowledge cannot be attributed to the Department in the absence of any declaration by the party and extended period of limitation is invocable and the demand is not barred by limitation. 6. The learned advocate of the respondents, on the other hand, submitted as under :- (i) Their manufacture of grey fabrics was from materials i.e. cotton yarn produced or manufactured in India and, hence, the procurement was governed by Notification No. 1/95-C.E., dated 4-1-1995. As per condition in para 1(d), there was a requirement of execution of Bond for safeguarding duty on capital goods, packaging materials an....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The learned advocate pointed out that the provisions of FTP 2004-09 and FTP 2002-07 are pari materia in this regard. (iii) In any case, whatever the duty paid on inputs, capital goods, as well as work-in-progress was available to the respondents as credit and hence, there was no inducement to evade payment of duty, which gets substantiated from the fact that the respondents applied for registration on 10-9-2003 and obtained registration on 12-9-2003 and availed credit of the duty paid on capital goods, spares and raw materials. When the entire exercise is leading to duty neutral, as whatever the duty, the respondents would have paid on work-in-progress materials, was available as credit to them on de-bonding, the demand is not sustaina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....also issued by the ACCE on 17-9-2003, that based on the aforesaid correspondence, the Development Commissioner had issued final de-bonding order on 22-9-2003. 8. The extended period is not invocable in the present case in the absence of any suppression, misstatement, etc. as the respondents had made an application for de-bonding to ACCE, after having obtained inprinciple approval from the Development Commissioner and the ACCE, through letter dated 25-8-2003, required the respondents to pay duty on capital goods, spare parts, packing materials and raw materials. From the above, it is clear that ACCE did not direct the respondents to pay duty on stock of goods-in-progress. 9. The respondents, through their letter dated 5-9-2003, informe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ined in the work-in-progress are required to be returned to the Department at the time of debonding yet even if duty on work-in-progress of Rs. 4,13,369/-, disputed in this appeal, would have been paid at the time of de-bonding, the same was available as credit to them and hence, there was no inducement to evade/avoid payment of duty on work-in-progress and hence, extended period is not invocable, based on the following judgment : (a) 2000 (119) E.L.T. 718 (Tri.-LB) - Jay Yuhshin Ltd. (b) 2007 (81) RLT 479 (Tri.-Che) - S.R.F. Ltd. It seems that only because of the lack of proper guidance by the Department to the respondents, this aberration occurred. From the facts and circumstances o....