2015 (7) TMI 266

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....circumstance where it has been held that there is no intention to evade payment of duty and extended period of limitation cannot be invoked for the period subsequent to August, 1996, whether the Tribunal was correct in holding that the extended period of limitation can be invoked for the period prior to August, 1996, when facts involved is identical for both the periods?" 2. The facts, in a nutshell, are as follows : - The assessee/appellant herein manufactured housing and freight containers on job work basis for its principal, M/s.Balmer Lawrie & Co., Cochin, on being supplied with raw materials free of cost under invoice and the appellant took Modvat credit on the raw materials and M/s.Balmer Lawrie cleared the said goods on payment of ....

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.... for manufacturing activity and therefore were required to be reckoned while the assessable value of the finished goods was calculated for the purpose of payment of duty. Since the service charges had not been included in the assessable value of housing containers and freight containers, a show cause notice dated 13.10.98 was issued proposing to recover duty to the tune of Rs. 2,55,000/-, which was alleged to have been short-paid during the period 1995-1996, 1996-1997 and 1997-1998 upto November, 1997 and also invoking the extended period of limitation as well as proposing recovery of interest and imposition of penalty. 4. After adjudication, the demand made, including interest and penalty, were upheld by the adjudicating authority by pass....

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....ression post August, 1996 and, accordingly, the demand was set aside for the period subsequent to August, 1996 and interest under Section 11AB and penalty under Section 11AC for the said period, viz., post August, 1996 were also set aside. However, the penalty of Rs. 50,000/- imposed under Rule 173Q and Rule 226 was upheld. Para-2 of the order of the Tribunal, is quoted hereinbelow, for better clarity :- "2. We have heard both sides. We find no merit in the contention of the assessee that the service charges are not required to be included in the assessable value of housing containers and freight containers. From the nature of the services it is clear that they were provided to facilitate manufacture of the goods and, therefore, the expens....

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....ppearing for the respondent/Department and perused the materials available on record. 8. On a careful consideration of the entire gamut of facts, the answer to the question of law raised by the assessee is found in para-2 of the order of the Tribunal itself. It has been held by the Tribunal that there is a clear case of suppression for invocation of extended period of limitation for the period prior to August, 1996, as the activities of the appellant/assessee came to light subsequent to an investigation by the Department. However, insofar as the period post August, 1996, on the plea of suppression, the Tribunal was correct in setting aside the demand on the ground that the department was aware of the activities of the appellant/assessee an....