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TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 174
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....s, UPS systems, industrial automation devices, video and audio display systems and electric motors etc. The appellant claims that for this purpose it has been procuring various inputs, capital goods and input services and also availed CENVAT Credit on excise duty and service tax paid on the said items. The appellant has also stated that during the period of dispute from April 2010 to March, 2011, it was also engaged in the manufacture of Solar Power Systems, but these goods were exempted from levy of excise duty under a Notification. During this period, the appellant manufactured 48 Solar Power Systems worth Rs. 4,98,23,250/- and cleared the same from the factory without payment of excise duty. 3. The Audit Team reviewed the books and records maintained by the appellant from June 17, 2011 to June 22, 2011 and raised an objection that as the appellant was manufacturing both dutiable (UPS systems etc.) and exempted goods (Solar Power Systems), the appellant was required to comply with the condition contained in rule 6 of the 2004 Credit Rules. Objections were, therefore, raised by the audit team, to which the appellant filed a reply stating that principal inputs for solar power sys....
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....he issue regarding invocation of the extended period of limitation contemplated under section 11A(4) of the Central Excise Act and submitted that if this issue is decided in favour the appellant, it would not be necessary to the appellant to make submissions on merits. 9. It is for this reason that on August 24, 2021 submissions relating to invocation of the extended period of limitation were only heard. 10. Learned counsel appearing for the appellant submitted that though the audit was undertaken between June 17, 2011 up to June 22, 2011 and audit objections were raised on September 09, 2011, but the show cause notice was issued to the appellant on January 28, 2013 alleging non-filing of ER-5, ER-6 and ER-7 for the period of 2010-11 and seeking to levy penalty for the same on the basis of audit observations, without making any allegation regarding non-maintenance of separate records. This show cause notice was adjudicated upon by order dated January 28, 2013 by confirming the demand made on penalty. Thereafter, another show cause notice dated March 19, 2015 was issued to the appellant nearly four years from the audit inspection alleging non-maintenance of separate records. The....
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.... 2015 and the order passed by the Commissioner (Appeals) 14. The relevant portion of the show cause notice is reproduced below: "2. During the course of audit by the Audit Officers of AGUP Lucknow it has been observed in audit note No. 89/2011-2012 that the party has cleared Tele-power system and UPS system after payment or excise duty. The solar power system was exempted from excise duty vide notification No. 06/2006, Serial No. 84 list Nos. 05. The party produced 48 Nos of Solar Power System and cleared the same for Rs. 4.98,23.250/- without payment of duty during the year 2010-11. The party neither made a separate account nor reversed the proportionate credit availed on exempted goods. 3. Whereas, as per Rule 6(3) of the CENVAT credit Rules, 2004, the manufacturer of goods or the provider of out-put service opting not to maintain separate accounts, shall follow, either of the following option, as applicable to him- i. The manufacturer of goods shall pay an amount equal to 5% value of the exempted goods and the provider of the output service shall pay an amount equal as 5% of value of the exempted service or ii. The manufacture of goods or the provider of out-put servic....
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...., question of mis-representation or suppression of facts does not arise at all. The Department was always aware about the practice of the Appellant and there was no mis-representation or suppression by the Appellant. Further, the Department has failed to show any positive act of concealment or willful non-disclosure on the part of the Appellant. Thus, the issuance of the SCN invoking the extended period is unsustainable and therefore the SCN and Impugned Order should be quashed on this ground only. (v) SCN was issued after a period of more than three years from audit and hence, has been inordinately delayed Without prejudice, it is submitted that the SCN was issued by the Ld. Assistant Commissioner on 19.03.2015 and thus has been issued after a period of more than 3.5 years from the period of audit (i.e. 17.06.2011 to 22.06.2011). It may be noted that during this interim period, there was no challenge made to the method followed by the Appellant under Rule 6(2). However, the SCN alleging non- payment of excise duty on Solar Power Systems was issued by the Ld. Assistant Commissioner in 2015 after invoking the extended period of limitation. It is submitted that the SCN was thus iss....
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....oner and the reasons for delay, it will be travesty of justice if the criminal proceedings are truncated at the conclusion of the pre-charge evidence and when the case is fixed for hearing of the arguments on charge. The Court, in fact, could render justice to the petitioner by giving appropriate directions to the ACMM for expeditious disposal of the case in a time bound schedule." Hence, I do not agree with the appellant contention on this issue" (emphasis supplied) 17. Learned counsel for the appellant submitted, which fact is not disputed by the Department, that the period of one year would commence from October 09, 2011 and so the notice that was issued on March 19, 2015 was beyond the period of one year. It has, therefore, to be seen whether the extended period of five years could be invoked in the facts and circumstances of the case. 18. A perusal of section 11A (1) of the Excise Act shows that where any duty of excise has not been paid for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Excise Act with intent to evade payment of duty, the Central Excise Officer....
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.... 7 SCC 749] and the relevant paragraph is as follows:- "27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceuticals Co. v. CCE we find that "suppression of facts" can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties, the omission by one to do what he might have done and not that he must have done, would not render it suppression. It is settled law that mere failure to declare does not amount to wilful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made hereinabove that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in the proviso to Section 11-A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to CEGAT to come to a conclusion that the appellant was guilty of "suppression of facts." (e....
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....be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a wilful misstatement. The latter implies making of an incorrect statement with knowledge that the statement was not correct." (emphasis supplied) 25. In the present case, what is seen is that the audit was conducted between June 17, 2011 to June 22, 2011 and the show cause notice refers to this audit only. The notice, therefore, should have been issued within one year from the relevant date and there is no good reason as to why the Central Excise Officer should have waited till March 19, 2015 to issue the show cause notice. The extended period of limitation, for this reason alone, could not have been invoked. Even in a case of self-....