TaxTMI 
TaxTMI 
2018 (10) TMI 267
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....3 to 10.07.2004, under Section 11A (2) of the Central Excise Act, 1944 (hereinafter referred to as 'the Act'). The Adjudicating Authority ordered appropriation of Rs. 13,11,900/- paid by the assessee under various challans towards part of duty, which was confirmed as stated supra. Penalty under Section 11AC of the Act was imposed on the assessee and there was a demand of interest under Section 11AB of the Act. Apart from the duty liability, penalty and interest, a personal penalty was imposed on the Managing Partners, which, of course, were set aside and are not subject matter of this appeal. 2.The above appeal has been admitted on the following substantial question of law, vide order dated 08.01.2016: "Whether on facts and in the circumstances of the case, the respondent was right in invoking extended period of limitation under Section 11A of the Central Excise Act and imposition of penalty under Section 11AC when all relevant information were within the knowledge of the department from 02.12.2003 ?" 3.During the course of arguments, learned counsel appearing for the assessee submitted that the assessee may be permitted to raise one more question of law revolving on th....
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....it been so, they would not have obtained central excise registration on 16.05.2003. Further, it is submitted that when textile material was brought under the excise fold, there was protest from the trade and some associations assured its members that the levy of duty will be withdrawn and that they were waiting for some time and in the absence of positive indication for withdrawal of levy, they obtained registration and commenced sales activities from 16.05.2003 and having obtained certificate, they were fully aware of the liabilities and on account of various factors which the assessee had to undergo and the financial crunch, they had sent a letter on 03.12.2003 and paid a sum of Rs. 2 lakhs and effected payments in instalments up to the year 2005 to the tune of Rs. 11 lakhs. Further, they have submitted that the assessee has Cenvat credit to the tune of Rs. 21,58,496/- and if this is adjusted as against the duty liability, the balance will be only Rs. 2,11,900/- and the same was also paid on 28.12.2006. 6.The Adjudicating Authority, after considering the facts and circumstances of the case, confirmed the proposal in the show cause notice by passing Order-in-Original dated 28.09.....
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....ch were used in manufacture of power driven pumps would also be exempted. Therefore, the contention was that, that Notification No.95/94 dated 25.04.1994 was, thus, merely clarificatory in nature and an obvious error or omission which remained while issuing Notification No.46/94 dated 01.03.1994 was rectified by Notification No.95/94 dated 25.04.1994 and hence, it was retrospective in operation. The Hon'ble Supreme Court accepted the contention raised by the assessee noting that in view of the consistent policy of the Government exempting parts of power driven pumps used in the factory within the factory premises, it could not be said that while issuing Notification No.46/94 dated 01.03.1994, exemption in respect of the said item which was operative was either withdrawn or revoked and the action was taken only with a view to rescind several notifications by issuing composite notification and the policy remained as it was and therefore, the withdrawal Notification No.95/94 dated 25.04.1994 was not a new notification granting exemption for the first time in respect of parts of power driven pumps, but it has clarified the position and made the position explicit which was implicit.....
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....he substantial question of law no.2 framed above is answered against the assessee. 12.Coming to the first question of law, the learned counsel for the assessee would contend that the invocation of extended period of limitation under Section 11A of the Act and imposition of penalty under Section 11AC of the Act was incorrect, when all relevant information were within the knowledge of the department from 02.12.2003. The learned counsel placed reliance on the decision in the case of AP Steels vs. Commissioner of Central Excise, [2017 (355) ELT 6 (Mad.)] and the decision of the Hon'ble Supreme Court in the case of Commissioner vs. Gohil Packaging P. Ltd., [2017 (349) ELT A87 (SC)] as also the decision of a Division Bench of this Court in the case of V.N.K.Menon & Co. vs. CESTAT, Chennai, [2015 (323) ELT 524 (Mad.)]. 13.The learned standing counsel appearing for the Revenue contended that the issue raised by the assessee was elaborately dealt with by a Division Bench of the High Court of Gujarat in the case of Commissioner of Central Excise, Surat vs. Neminath Fabrics Pvt. Ltd., [2010 (256) ELT 369 (Guj.)] and the said decision is the direct answer to the contention advanced by th....
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....d case, the Division Bench considered the statutory provisions, the decision of the Delhi High Court in the case of K.P.Pouches (P) ltd. vs. Union of India, [2008 (228) ELT 31 (Del.)] as well as the Circular issued by the Central Board of Excise and Customs dated 22.05.2008 and held that benefit of 25% penalty is applicable only when the assessee has paid the duty, reduced penalty and interest within 30 days of the communication of the order passed by the Adjudicating Authority and only where penalty was enhanced at the appellate stage that in case of the 25% of the differential amount, the penalty amount can be paid within 30 days of the order and not otherwise. 15.The Court took note of the decision in the case of Sri Sai Enterprises vs. Commissioner of Central Excise, [2013 (288) ELT 40 (Del.), where the assessee failed to make payment of the service tax and interest but nevertheless sought to avail the benefit of the reduced penalty in terms of the proviso to section 11AC of the Act and the Court distinguished the earlier decision in K.P. Pouches (P) Ltd. case, supra, and held that it was clear from the conduct of the assessee that he never wanted or showed any inclination to ....
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.... 25% of the service tax. This is, of course, subject to payment of not only the service tax and interest but also the reduced penalty within 30 days of the "communication of the order" of the adjudicating authority." 16.In the light of the above decision, the plea raised by the assessee that they should have been granted the opportunity to pay 25% is unacceptable on the facts of the case. 17.Next we move on to the question as to whether the extended period of limitation could have been invoked. This very issue has been answered in the decision in Neminath Fabrics Pvt. Ltd. (supra) by the High Court of Gujarat. The question which was framed for consideration was 'whether the Tribunal was justified in importing the concept of knowledge in the provisions of Section 11A of the Central Excise Act, 1944 read with sub-section (1) and the proviso thereto'. 18.Learned counsel for the assessee before us contended that the department had knowledge of the entire matter as early as in December, 2003, when they had made an inspection of the factory. However, show cause notice was issued only in the year 2007 and the extended period could not have been invoked in the instant case. The....
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....periodical return, showing particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed; (B) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (C) in any other case, the date on which the duty is to be paid under this Act or the rules made thereunder; (b) in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (c) in the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund. 11. A plain reading of sub-section (1) of section 11A of the Act indicates that the provision is applicable in a case where any duty of excise has either not been levied/paid or has been short levied/short paid, or wrongly refunded, regardless of the fact that such non levy etc. is on the basis of any approval, acceptance or assessment relating to the rate of duty or valuation under an....
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.... absent. Hence, if one imports such concept in sub-section (1) of section 11A of the Act or the proviso thereunder it would tantamount to rewriting the statutory provision and no canon of interpretation permits such an exercise by any Court. If it is not open to the superior court to either add or substitute words in a statute such right cannot be available to a statutory Tribunal. 17. The proviso cannot be read to mean that because there is knowledge the suppression which stands established disappears. Similarly the concept of reasonable period of limitation which is sought to be read into the provision by some of the orders of the Tribunal also cannot be permitted in law when the statute itself has provided for a fixed period of limitation. It is equally well settled that it is not open to the Court while reading a provision to either rewrite the period of limitation or curtail the prescribed period of limitation. 18. The Proviso comes into play only when suppression etc. is established or stands admitted. It would differ from a case where fraud, etc. are merely alleged and are disputed by an assessee. Hence, by no stretch of imagination the concept of knowledge can be re....
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....ntion that once knowledge has been acquired by the department, there is no suppression and the ordinary statutory period of limitation prescribed under sub-section (1) of section 11 would be applicable was rejected as a fallacious argument inasmuch as once the suppression is admitted, merely because the department acquires knowledge of the irregularity, the suppression would not be obliterated. 20.In the instant case, it has been established that there has been suppression, there has been clandestine removal of excisable goods without payment of excise duty, the assessee having collected excise duty from the customers did not remit it to the department and the assessee did not obtain registration from the department nor maintained any records and obtained registration under the provisions of the Act only on 16.05.2003. Thus, these facts would clearly establish that the extended period of limitation was invocable in the assessee's case. 21.The further contention raised by the learned counsel for the assessee that excise duty was paid by the assessee in instalments to the tune of about Rs. 11 lakhs between 2003 and 2005 ought to have been considered. We are unable to accept the....