TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 321
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....on 11A(2) of the CEA'44 and the same is recoverable from M/s TF. 3. Interest at Appropriate rate should also be recovered under the provision of of Section 11AB of the Central Excise Act, 1944. 4. I impose a penalty of Rs. 28,47,871 (Rupees Twenty Eight Lakhs Forty Seven Thousand Eight Hundred and Seventy One) under the provision of Section 11AC) of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002." 2.0 Demand has been confirmed against the Appellant after denying him the benefit of Small Scale Exemption Notification No 8/2003-CE dated 1.03.2003 on the ground that the appellants aggregate value of clearances crossed the limit prescribed by the said notification. 3.1 We have heard Shri D B Shroff, Ld Counsel for the appellant and Shri A B Kulgod, Assistant Commissioner, Authorized Representative for the revenue. 3.2 Learned Counsel for the appellant submitted at the outset that he is arguing his case only on the grounds of limitation and would be not pressing any other ground taken in the appeal. Arguing on limitation he submitted- i. Appellants are engaged in manufacture of tanks and textile machinery. ii. The tanks are mounted on the chass....
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....t he was only arguing vis a vis the limitation and not pressing any other ground taken in appeal we are deciding the matter only on the ground of limitation. 4.2 On the issue of Limitation learned Adjudicating Authority has recorded as follows in his order- "4.2 M/s TF in the declaration filed had not considered the cost of raw material and chassis supplied free of cost by their buyer despite the decision of the Hon'ble Supreme Court in case of Ujjagar Print. Though, M/s TF was under a bonafide belief that the cost of chassis should not be added in the assessable value of the gods, but it was seen that M/ T received the raw material from their buyer free of cost for the manufacture of "Tank" which was mounted on chassis an still the cost of raw material had not been added in the assessable value and declared to the department. It was seen from the above, that for the financial yea 2006-07 onwards, M/s TF had exceeded value of clearance of Rs. 4 Crore by adding the cost of raw material only and thereby not eligible for benefit of "Nil" rate of duty for other excisable goods under the Notification No 8/2003 dated 1.3.2003. Therefore, M/s TF had suppressed the correct value of clear....
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....uppressed the correct value in the declaration filed, provisions of extended period is invokable and penalty is impossible." 4.4 We do not find any merit in the submission of the appellants with regards to filing of declaration. We have perused the declarations filed by the appellant and filed that appellants were declaring the value of goods cleared by availing the benefit of exemption. The said declarations are reproduced below: 4.5 Thus it is fact that appellants were fully aware of their responsibilities an liabilities in terms of Notification No 8/2003-CE dated 01.03.2003. However while making the said declaration they had suppressed the value of the goods by not taking into account the value of the raw material/ chassis supplied free of cost by the principal manufacturer. The appellants have claimed that this value was not included by them as they were under the bonafide belief that cost of such free supply raw material was not to be included in the value of final product (tankers) cleared by them claiming exemption under notification No 6/2002-CE and 6/2006-CE. However the reason for entertaining such a bonafide belief has not been put forth. The issue in respect of the a....
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....e appellants suppressed the vital information from the Department with intent to evade payment of Service Tax. We uphold the order of the Commissioner (Appeals) confirming the demand of Service Tax together with interest. 4.8 Similar view has been expressed by the Tribunal in following cases: a. Winner Systems [2005 (191) ELT 1051 (T)] "5. The second contention of the appellants is that while computing the demand the department has taken the value of the computer resold by them after procuring them from various vendors. We examined this contention. The Commissioner in his order examined the evidence produced by the appellants in this regard and whenever such evidence suggested that computers were bought from vendors, he took that fact into consideration while computing the duty liability. Further the appellants themselves have given a list of computers bought out by them. According to them they purchase 37 computers from outside and sold them again. The appellants have also contended that extended period of limitation is not applicable as they entertained a bona fide belief that no duty is payable by them. In respect of computers sold by them in the year 1989-90 they contended t....
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....9 The tribunal has in case of L'OREAL India Pvt Ltd Vs Commissioner of Central Excise Pune [2015 (330) ELT 253 (T-MUM)] has held- "5.11 Reliance is placed on the decision of the Hon'ble Gujarat High Court in the case of Neminath Fabrics Pvt. Ltd. [2011-TIOL-10-HC-AHM-CX = 2010 (256) E.L.T. 369 (Guj.)] and the Larger Bench decision in Union Quality Plastic Ltd. [2013-TIOL-1072-CESTAT-AHM-LB = 2013 (294) E.L.T. 222 (Tri.-LB)] wherein it has been held that knowledge and awareness of the department is not a relevant factor for invocation of extended period of time. In these decisions, it was ruled that whenever there is non-levy or short-levy of duty with an intention to evade payment of duty or any of the circumstances enumerated in the proviso to Section 11A(1) of the Central Excise Act, such suppression or wilful omission is either admitted or demonstrated, invocation of the extended period of limitation would be justified." 4.10 Further both Commissioner (Appeal) and Adjudicating Authority has after considering all the facts concluded that extended period is invokable. 4.11 In view of above we do not find any merit in the submission of the appellants in respect of invoking the ....
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....actured by the appellant. 3. The appellant, however continued to avail the benefit of the Small Scale Exemption Notification No.8/03 for the period after 01/03/2003. As the said Notification required the appellant to file declaration with their Jurisdictional Central Excise Authorities, they filed the same on annual basis, disclosing the clearances value of the Tankers being manufactured by them. The said declarations are on record and stand included as a part of the order proposed by learned Member Technical. 4. The dispute arose as to whether the value of the Tankers is required to be taken into consideration alongwith the value of the Chassis supplied by the principal manufacturers so as to arrive at the value of total clearances of Rs. 4/- crores or not. Revenue by entertaining a view that the value of the Chassis supplied by the principal manufacturers is also required to be taken into consideration, found that the total value of clearances from the appellant's factory exceeded Rs. four crores, in which case the appellant would not be entitled to the benefit of Small Scale Exemption Notification in respect of their other product i.e. textile machinery. Accordingly, proceedin....
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....ade payment of duty, the period of five years is available to the Revenue to serve notice on such person for such short paid duty. The said expression appearing in Section 11A has been the subject matter of various decisions of the Supreme Court. Reference can be made to the Hon'ble Supreme Court decision in the case of Collector of Central Excise vs. Chemphar Drugs reported as 1989 (40) E.L.T. 276 (S.C.). It stands held that extended period of five years is applicable only when something positive other than mere inaction or failure on the part of manufacture is proved. Similarly in the case of Pushpam Pharmaceuticals Company vs. Collector of Commissioner of Excise, Bombay [1995 (78) E.L.T. 4 (S.C.) it was observed that the expression "suppression of facts" appearing in Section 11A, proviso has to be interpreted strictly because it has been used in the company of strong words as fraud, collusion or willful default. Mere omission to disclose the correct information is not suppression of facts unless it was deliberate to escape from payment of duty. In the background of the above declaration of law by the Hon'ble Apex Court, I proceed to decide the point of limitation. 7. The questi....
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....n terms of the Small Scale Exemption Notification, the said ratio of law declared by the Hon'ble Supreme Court is to be followed. As already observed the appellant had been filing the declaration for the period pre as well as post amendment adopting only the value of the Tanks fabricated by them. Revenue was well aware of the amendment in the law and on filing of declaration by the assessee, never raised any objection or any question to the assessee as to whether the value of the Chassis stands included by them or not in the said declaration. Admittedly the value of the Chassis is much more than the value of the Tanks and value shown in the declaration was sufficient for the appellant's Jurisdictional Range Central Excise Authorities to raise eye brow as regards the inclusion of the value of the Chassis, if they would have scrutinized the declarations properly. As such in my views the mere non-inclusion of the value of the Chassis in the said declarations, on a bona fide belief and continuation of the earlier practice, would not be a sufficient factor so as to raise the extended period against them. The Revenue is under an onus to show some positive guilty mind of the assessee to j....
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....d in Court on 18.03.2019) Per: Dr. D.M. Misra Heard both sides. 2. The present case has been referred by Hon'ble President on account of difference of opinion between Hon'ble Member (Judicial) and Hon'ble Member (Technical) on the issue whether the demand of duty be restricted to the normal period as held by Hon'ble Member (Judicial) or the demand of duty, interest and penalty be confirmed invoking extended period of limitation as held by Hon'ble Member (Technical). 3. To appreciate the points of difference, it is necessary to summarize the facts in brief. The Appellants are availing SSI exemption benefit in the manufacture and clearance of excisable goods viz. Textile machinery and Tankers (other than LPG tankers) falling under Chapter 84287 of Central Excise Tariff Act, 1985 respectively during the relevant period from 2004-05 to 2008-09. Alleging that the Appellants had not included the value of free issue material and also the value of chassis in the aggregate value of the clearances of Tankers manufactured on job work basis, computed under Notification No.08/2003-CE, dt.01.03.2003, demand notice was issued to them, proposing recovery of duty of Rs. 32,46,526/- along wit....
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.... material received and used in the manufacture of Tankers during the financial year. He submits that in their reply to the Show Cause Notice, they have disputed inclusion of value of free issue material and that of chassis in the value of tankers, submitting that since they were not involved only in the fabrication of the tankers and not manufacturing chassis, therefore, the value of chassis cannot be added to the value of job work charges. Therefore, their claim that they are not aware of the principle of law in this regard as laid down by Hon'ble Supreme Court in Ujagar Prints case, is unacceptable. Further, he has submitted that w.e.f. 01.03.2003, an explanation has been added to the Rule 5 of Central Excise Valutation Rules 2000, where-under it is specifically laid down that the value of free issue material be included in the value of finished goods manufactured. It is his contention that the meaning of the 'value' as used in the Notification No.08/2003-CE, dt.01.03.2003 be understood to be determined as per Section 4 of Central Excise Act, 1944. Hence, the demand is barred by limitation. 6. I have carefully considered the submissions advanced and perused the records. I f....