TaxTMI 
TaxTMI 
2019 (8) TMI 1252
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....under these show cause notices has been unenforceable against the appellants. 1.01. This Court admitted the present Appeal to consider the following substantial question of law :- "Whether the Customs Excise and Service Tax Appellate Tribunal was justified in holding that it was permissible to the Revenue to invoke larger period of limitation vide show cause notices dated 22.10.2007 and 14.11.2007 when three show cause notices for larger period of limitation had been issued to the appellants in the past for the same cause of dispute ? 1.02. Considering the fact that the controversy involved in the present Appeal is in a very narrow compass, this Court while admitting this Appeal vide order dated 21/2/2019, ordered to issue notice for final disposal and accordingly, this appeal is taken up for final hearing today. 2.00. Facts giving rise to file present appeal are as under :- 2.01. The appellant has been manufacturing automobile ports and components. For such manufacture, moulds, dies and patterns are required and therefore the appellant has been procuring moulds/dies/patterns from open market in accordance with the designs and dimensions of ports and components....
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...., and here also extended period of limitation under the proviso to Section 11A(1) was invoked on the same basis that income from pattern sales was not disclosed on excise invoices. 2.08. On appeal before the Tribunal for the case of the first show cause notice dated 25.7.2005, the Tribunal held that raising of demand on the value of patterns was not justified because value of such moulds and dies could have been added in the assessable value of the final products manufactured by the appellant only on pro-rata basis. The Tribunal also observed that the aspect of limitation was not dealt with by the lower authorities by taking into account the overall facts and circumstances of the case, and the plea of the appellant that the figures of sales of patterns were picked up from the balance-sheet which was a public document and hence no malafide could be attributed to the appellant was also required to be taken into account. The case was remanded by the Tribunal. 2.09. On appeals involving the second and third show cause notices, the Tribunal has allowed the case of the appellant case relying on judgement of the Hon'ble Supreme Court in case of Nizam Sugar Factory reported in 20....
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....sequent show cause notice in that case was issued for the subsequent period invoking extended period, but in the present case, the period involved in the show cause notice was prior to the period involved in first three show cause notices, and therefore the ratio of the iudgement in case of Nizam Sugar Factory can not apply. The demand for extended period of limitation in respect of fourth and fifth show cause notices is upheld with penalty even though such demands were based on the same document, namely, audited balance-sheets verified by the auditors. Hence, this petition. 3.00. Heard Mr.Paresh Dave, learned counsel for the appellants Mr.Mitesh Amin, learned Government Pleader appearing for the respondent - revenue. 4.00. SUBMISSIONS OF THE APPELLANTS :- 4.01. Mr.Paresh Dave, learned counsel appearing for the appellants vehemently submitted that the Hon'ble Supreme Court has held in case of Nizam Sugar Factory (supra) that in a case where the Revenue issued a show cause notice to an assessee for a specific subject, it meant that the Revenue was aware about the dispute for which show cause notice proceedings were initiated, and therefore the Revenue cannot issue another s....
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.... one cannot make out from the balancesheet that the income was from sales of patterns which were used in the manufacture of the final products for the buyers. On this basis, allegations of suppression of facts and misdeclaration are upheld against the appellant. But while deciding previous appeal Nos. E/2986/2006 and E/11811182/2007, the Tribunal has held that figures of sales of patterns having been picked up from the balance-sheets which were public documents, there was no suppression of facts by the appellant as regards sales of such patterns and hence larger period of limitation was not available to the Revenue. Furthermore, all the show cause notices were issued on basis of audit verification of balance sheets only and therefore there was no suppression in respect of demand raised in fourth and fifth show cause notices. It is submitted that thus, the basis on which the impugned order is passed is not only illegal, but is also contrary to the final decisions rendered by the Tribunal in previous cases of the appellant herein, and hence unreasonable also. 5.00. Submissions of the revenue :- 5.01. Mr.Mitesh Amin, learned Government Pleader appearing for the respondent has op....
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....e included in the transaction value. Therefore, the demand on merit is clearly sustainable. 5.05. Mr.Amin has further contended that the appellant has shown income from sales of pattern in the balance sheet from which no one can make out that whether the sales pattern is related to those pattern which were used in the manufacture of final product for buyer by using pattern belonging to the buyer. Therefore, there is clear suppression of facts and mis-declaration on the part of the appellant. Therefore, the authority has rightly issued the impugned notice and the tribunal has rightly passed the order impugned in the present appeal. 6.00. The law about invocation of extended period of limitation is well settled. Only in a case where the assessee knew that certain information was required to be disclosed and yet the assessee deliberately did not disclose such information, the case would be that of suppression of facts. When the Excise Officers called or certain information and the assessee did not disclose the same or deliberately disclosed wrong information, that would be a case of willful mis-statement. Even in cases where certain information was not disclosed as the assessee ....
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.... a show cause notice could be issued within the extended period of five years, instead of the normal period of one year. For invoking the extended period of limitation under the proviso to Section 11A(1) of the Act, the Revenue must prove that the assessee was guilty of fraud or collusion or any willful mis-statement or suppression of facts or contravention with intent to evade payment of duty. Otherwise, any demand made by virtue of a notice issued under the proviso to Section 11A(1) invoking extended period of limitation would be timebarred, and hence impermissible and unenforceable. 6.05. The controversy involved in the present petition is no longer res-integra in view of the decision of the Supreme Court in the case of Nizam Sugar Factory (supra). In the said decision the Supreme Court has observed and held as under :- "8. Without going into the question regarding Classification and marketability and leaving the same open, we intend to dispose of the appeals on the point of limitation only. This Court in the case of P & B Pharmaceuticals (P) Ltd. v. Collector of Central Excise reported in (2003) 3 800 599 = 2003 (153) E.L.T. 14 (SC) has taken the view that in a case....
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.... invoked where the Department has earlier issued show cause notices in respect of the same subject-matter. It has been held that in such circumstances. it could not be said that there was any willful suppression or misstatement and that therefore, the extended period under Section 11A could not be invoked." Similarly, this judgment was again followed in the case of Hyderabad Polymers (P) Ltd. v. Commissioner of Central Excise, Hyderabad reported in 2004 166 ELT 151 (SC)]. It was observed in para 6 ; ".......... On the ratio laid down in this judgment it must be held that once the earlier Show Cause Notice, on similar issue has been dropped. it can no longer be said that there is any suppression. The extended period of limitation would thus not be available. We are unable to accept the submission that earlier Show Cause Notice was for a subsequent period and/or it cannot be taken into consideration as it is not known when that Show Cause Notice was dropped. If the Department wanted to take up such contentions it is for them to show that that Show Cause Notice was not relevant and was not applicable. The Department has not brought any of those facts on record. There....
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....4.5.2000 under section 14 of the Central Excise Act and statement of the Director had been recorded on 19.12.2000. In this regard, it may be pertinent to note that the earlier show cause notices came to be issued on 4.5.2000, 12.1.2001 and 26.6.2001, that is after most of the statements were recorded and as such, the reference to intelligence in the impugned show cause notices is of no consequence, since all the said facts were already before the central excise authorities at the time when the earlier show cause notices came to be issued. Therefore, it cannot be said that the impugned show cause notices are based on new or different facts than the earlier ones. Thus, the present case would stand squarely covered by the above referred decisions of the Supreme Court inasmuch as, when the earlier show cause notices had been issued for the later period on the same set of facts, the facts were within the knowledge of the Department. In the circumstances while issuing the present show cause notices, the same/similar set of facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. In the circumstances, the....
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....earlier ones. The present case is squarely covered by the above referred decisions more particularly the decision of the Supreme Court in the case of Niazm Sugar Factory (supra) as well as decision of this Court in the case of Gujarat Ambuja exports Ltd. (supra). Further when the earlier show cause notices had been issued for the later period on the same set of facts, the facts were within the knowledge of the Department and earlier notices were quashed by the tribunal relying on the decision of the Supreme Court in the case of Nizam Sugar Factory (supra), however, impugned order has been passed by the tribunal on the ground that since the show cause notices are for the prior period, the decision of the Supreme Court in the case of Nizsam Sugar Factory (supra) is not applicable. The said view of the tribunal is not correct. The case is squarely covered by the decision of the Supreme Court in the case of Nizam sugar Factory. Even the while issuing the present show cause notices, the same and/or similar set of facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. Under the circumstances, the respo....