2014 (1) TMI 680

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....assessee in addition to undertaking the manufacturing activity of HDPE woven sacks in full, also got the sacks stitched on contract basis. During the course of the tour of the unit, audit officers found a daily production register maintained by the assessee in the Finishing Section where the actual number of sacks stitched by each tailor datewise was recorded in the register for the period from November 2003 to January 2004. On a comparison between the production register and the RG 1 register, the audit officers found that assessee had failed to account for a total number of 2280692 HDPE sacks in their RG1 register. Proceedings were initiated by issue of show-cause notice on 30.12.2008 requiring the assessee to show-cause as to why duty sh....

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....notice was issued on 30.12.2008 and therefore the entire demand up to 30.12.2007 would be time-barred and according to the worksheet prepared by them, the demand attributable to period within the extended period of limitation would be slightly more than Rs. 2 lakhs. 3. The learned Superintendent (AR) submits that the production register on which the appellants are relying upon no doubt reflects the job work undertaken by the appellants. He draws our attention to the findings of the original adjudicating authority wherein he has observed that appellants were receiving HDPE granules and converting into fabrics and sending the same back on job work basis and the whole accounting system was in weight only whereas in the production register w....

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.... month of November will have to be excluded. 5. The learned counsel also relied upon 3 decisions in support of his submission that the show-cause notice was time-barred totally. The first decision is in the case of Pals Microsystems Ltd. [2011 (270) E.L.T 305 (S.C)]. In this case in para 17, Honble Court observed that the department could not establish that there was any suppression of facts or a fraud on the part of the respondent-assessee. We find that the honest mistake commited in maintenance of stock register etc. was frankly admitted by the Managing Director of the respondent-assessee. There is no finding to the effect that there was a fraud or willful mis-statement or suppression of facts. Thus, it is very clear that the notice ....