AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (12) TMI 269
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....ceiving bags in wagon loading platform through the loader, and loading it into the wagons including the Tally checking. 570102101101 Metric Tonn 6.30 3. Urea Product Handling & Bagging Wagon Loading-Manual direct loading of the wagons wherever the wagon loaders are not reaching-including the tally checking 570102102101 Metric Tonn 6.74 4. Urea Product Handling & Bagging Wagon Loading-Stacking of filled bags on the wagon loading platforms-and loading into the wagons including tally checking 570102103101 Metric Tonn 12.82 5. Urea Product Handling & Bagging Wagon Loading - Loading of the wagon from a distance of 50 feet and above - in case the wagon loading are not available due to maintenance etc . including tally checking. 570102104101 Metric Tonn 15.83 6. Urea Product Handling & Bagging Truck Loading - Loading of trucks/tractors directly-through the truck loader including tally checking 570103101101 Metric Tonn 4.03 7. Urea Product Handling & Bagging Truck Loading - Loading of trucks/tractors directly through the loading chutes 570103101102 Metric Tonn 5.41 8. Urea Product Handling & Bag....
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....bagging plat, building, silo, conveyor, screenhouse surrounding conveyor, conveyor pantry, shifting of urea lamps, torn bags, packing material etc. to the location marked by CFCL's representative and other related jobs-Godempan-II bagging area. 570107104101 Months 88124 19. Urea Product Handling & Bagging Miscellaneous Jobs- Housekeeping and cleaning of bagging plat, building, silo, conveyor, screenhouse surrounding conveyor, conveyor pantry, shifting of urea lamps, torn bags, packing material etc. to the location marked by CFCL's representative and other related jobs-Godempan-II bagging area. 570107104102 Months 39164 20. Urea Product Handling & Bagging Miscellaneous Jobs- Housekeeping and cleaning of track to keep track free from coal/debris 570107104103 Days 920.00 21. Urea Product Handling & Bagging Miscellaneous Jobs- Manpower assistance for misc. petty jobs. 570107105101 Mandays 66.75 22. Urea Product Handling & Bagging Miscellaneous Jobs- Standardizing of urea spillage - changing of cut and torn bag material to the new bags weighing to SO kgs as required. 570107106101 Metric Tonn 26.70 2.1 Revenue was of the view th....
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.... or wilful suppression. They argue that a positive act to establish either wilful mis-declaration for wilful suppression is a must for invoking the extended period of limitation of five years prescribed under section 73 of Finance Act, 1994. They rely on the following decisions of the Apex Court: (i) Pahwa Chemicals (P.) Ltd. v. CCE 2005 (189) ELT 257 (SC); (ii) Collector of Central Excise v. Chemphar Drugs & Liniments 1989 (40) ELT 276 (SC). Thus the counsel argues that the demand is not sustainable both on account of merits and on account of time-bar. 6. The Ld. DR, on the other hand places reliance on the contract between the Appellants and the CFCL which shows details of work done as given in the table in para 1 above. He points out that the entries in the table specifying the jobs to be done as specified at S. No. 1 to 11 are clearly jobs relating to loading of "cargo" into wagons or trucks and there were separate rates specified for such items of work. Even items at S. No. 13 to 17 are also relating to cargo. He argues that since most of the items of work specified in the contract are in relation to cargo handling and the contract is essentially for carg....
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....g description of the goods have all been regularly approved by the Department. 3. The Appellants have all along claimed that merely because they were affixing the label of a foreign party, they did not lose the benefit of Notification No. 175/8b-C.E. as amended by Notification No. 1/93-C.E. The view taken by the Appellants had, in some cases, been approved by the Tribunal which had held that mere use of the name of a foreign party did not disentitle a party from getting benefit of the Notifications. It is only after Larger Bench held in Namtech Systems Limited v. Commissioner of Central Excise, New Delhi reported in 2000 (115) E.L.T. 238 (Tribunal) that the position has become clear. It is settled-law that mere failure to declare does not amount to wilful mis-declaration or wilful suppression. There must be some positive act on the part of the party to establish either wilful mis-declaration or wilful suppression. When all facts are before the Department and a party in the belief that affixing of a label makes no difference does not make a declaration, then there would be no wilful mis-declaration or wilful suppression. If the Department felt that the party was not entitled to the....
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....eared by it should not be demanded under proviso (a) to Rule 10(1) of the Central Excise Rules and why penalty should not be imposed on it under Rule 173Q of the Central Excise Rules, 1944 for having cleared the goods without payment of duty in contravention of Rule 173Q (a) and (d) of the Central Excise Rules." 9.3 In the context of the above facts the findings of the Honourable Court in para 8 of the order is reproduced below: "8. Aggrieved thereby, the revenue has come up in appeal to this Court. In our opinion, the order of the Tribunal must be sustained. In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of ....
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.... the Schedule to the said notification, 'Handicrafts' were listed. It is, therefore, clear that 'handicrafts' were fully exempt from payment of duty of excise, according to the appellants. Under the Notification No. 111/78, dated 9th May, 1978, the appellants were exempted from licensing control. That is the case of the appellants." 9.5 The sentence underlined in the extracts of the case of Chemphar Drugs & Liniments (supra) and similar observations in the case of Padmini Products (supra) are being pointed out generally to argue that if an assessee does not do anything to discharge his duty/tax liability and simply keeps quite, it is not suppression. The interpretation canvassed is probably that unless the assessee has underground factories it cannot be considered as suppression. In the case of service tax it cannot probably be done under cellars. But it is quite often argued that the assessee was not aware of service tax or read the law and thought he did not have to take out registration or intimate department and if he acted so it cannot be a positive act of suppression. 9.6 Against this background let us examine some decisions wherein the Apex Court held that there was suppre....
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....n the said input. 3. A show-cause notice dated 5-3-2001 was issued by the Commissioner of Customs and Central Excise, Aurangabad, in which it was alleged that Anurang was receiving inputs from Bajaj at an undervalued landed cost by not including expenses on account of sales tax, octroi, freight, insurance, loading unloading charges and handling charges, and that Bajaj was charging only the basic price of such inputs equal to the basic price charged by the original manufacturers of the said inputs to Bajaj, and since the additional cost of loading-unloading, freight etc. was not included in the input supplied to Anurang, there was consequent reduction in the landed cost of such inputs. It was also alleged that the price charged by Bajaj was depressed price although the same was coloured as negotiated price and the price indicated in the purchase orders was influenced by the supply of inputs by Bajaj at a lower landed cost and by this business arrangement, Bajaj had compensated Anurang for depressed prices of Anurang's finished goods supplied to Bajaj." "16. In our view, on a reading of the relevant provision the extended period of limitation as provided by the proviso to Section 1....
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....nt or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case." 10.2 If there cannot be general rule, the rule of "positive act of suppression" itself cannot be a general rule for reasons as explained below. 10.3 Suppression with intent to evade payment of duty is seldom done by actions leaving trails and therefore the "positive act" that the Apex Court was referring to is not something which can always be demonstrated through existence of a physical thing or document. It is about a state of mind. This is to be judged from the facts of the case. 10.4 All the cases pointed out were with reference to a registered assessee and before self-assessment system came into existence. With the scheme of self-assessment the onus on the part of the assessee to disclose information to the department has become all the more important. The first step in such disclosure is taking registration. The second step is in filing returns filling all columns in the return in a bona fide manner and not in a clever manner. 10.5 Section 11A of Central Excise Act and section 73 of the Finance Act, 1994 tries to strike a ....
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....de that there was no wilful suppression. 12. Now let us consider the facts of the present case. At least 15 out of the 22 items of work specified are about loading of cargo. Some of the other items of work also have nexus to such cargo handling. The definition of the relevant entry in Finance Act, 1994 covers loading as also of unloading of cargo. By a simple understanding of the matter the activity will be covered by the definition. The question whether loading through automated systems would be covered arises out of a legal interpretation. By simple understanding of the definition if the service is covered it is necessary that the service provider discloses the facts to the department and seeks clarification. If the person concerned just waits for the department to come and knock at his door it is a mental state demonstrating suppression with intention to evade". It is not necessary that such state of mind is demonstrated by an act like displaying a board or having a letterhead holding out his activity to be just trading (just as an example of an activity not subjected to service tax) with no mention of his main activity of cargo handling, though such an act will show a higher l....
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....pplier agency and the entire loading and unloading or packing work is fully mechanized. They have further submitted that automatic filling machine and conveyor carries bags and loader machines are in the ownership of CFCL and they have no control on the said machinery. Packing and loading activity was, in fact, continuous process to the manufacturing of Urea and the labourer provided by the appellant were just overseeing and guiding these activities. Automatic machine itself fills the bags, the conveyor carries bags up to and into the railway wagon and or through loader machine the bags were loaded on the trucks. It is only when the loader machines are not reaching to the trucks, the work was carried out manually. They have specifically contested that they have only supplied the manpower to do above job and mere manpower supply would not come into the category of "cargo handling services". It stands contended by them that if the labour is provided for carrying construction activity, the same would not be covered by the construction category. They have specifically relied upon the Board's circular No. B-11/l/2002-TRU dt.1.8.02 clarifying that individual undertaking who hires laboure....
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....issioner (Appeals) has also not given any finding on issue of time bar, though this specific ground, was raised in the memo of appeal. 20. Learned Advocate appearing for the applicant has strongly contested the demand on the point of limitation by submitting that the extended period of limitation is available to the Revenue in case fraud, collusion, misstatement or suppression of facts or contravention of any provisions with intention to evade payment of duty. Neither of the lower authorities have referred to any evidence attributable to the appellants so as to give finding of suppression or misstatement against them with intention to evade payment of duty. It stands strongly contended before us that merely non-intimation to the Revenue about existence of the appellant and about the fact of providing services cannot be held to a ground for invoking longer period inasmuch as the same is not specified ground in the provision of section 73 of Finance Act. In any case, it stands contended by referring to Hon'ble Supreme Court's decision in the case of Pahwa Chemicals (P.) Ltd. (supra) as also in the case of Chemphar Drugs & Liniments (supra) as also to the decision of Supreme Court in....