2022 (3) TMI 1269

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....ormed an opinion that said exemption was applicable only to the pre-packaged goods intended for retail sale where as the software imported by the appellant was not for retail sale but was meant for the machines imported by them. The availment of said exemption was alleged as wrong. Department further observed that the appellant discontinued the practice of availment of exemption after 17.4.2013. On being pointed out the appellant deposited Rs. 62,671/- as Customs duty along with interest of Rs. 11,132/- and penalty of Rs. 8,148/- for the period from 2013-14 on 17.4.2015. But the total differential Customs duty as Rs. 12,63,673/- for the period 2011-12 to 2013-14 was still alleged to have been evaded by the appellant. Accordingly a Show Cause Notice No. 02/2016 dated 28.1.2016, the said differential amount of duty was proposed to be recovered along with interest alleging suppression on the part of the appellant, not only the extended period of limitation was invoked but penalty was also proposed to be imposed upon the appellant. The said proposal was initially confirmed by the Order-in-Original No. 102/17-18 dated 10.12.2018. The said order has been upheld and the appeal has been....

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....ailed only on the ground of limitation. Hence the judgement is confined to the said aspect only. 6. Relevant provision for recovery of duty and time period is section 11A of the Central Excise Act, which reads as follows: SECTION [11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, 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 this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within [two years] from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,- ....

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....erefore, involves in essence mens rea. 10. The expression "suppression" has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fraud' or "collusion" and, therefore, has to 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 willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. 11. .............. 12. As far as fraud and collusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word 'wilful', preceding the words "m....

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....s. It is in this background the Tribunal was justified in setting aside the order passed by the appellate authority and in restoring the order passed by the original authority. Therefore, there is no merit in this appeal. Accordingly, it is dismissed." 11. Further I draw support from the decision of Hon'ble Apex Court in the case of Tamil Nadu Housing Board vs Collector of Central Excise, Madras (supra) wherein it was held as under: " A bare reading of the proviso indicates that it is in nature of an exception to the principal clause. Therefore, its exercise is hedged on one hand with existence of such situations as have been visualised by the proviso by using such strong expression as fraud, collusion etc. and on the other hand it should have been with intention to evade payment of duty. Both must concur to enable the Excise Officer to proceed under this proviso and invoke the exceptional power. Since the proviso extends the period of limitation from six months to five years, it has to be construed strictly. The initial burden is on the Department to prove that the situations visualised by the proviso existed. But once the Department is able to bring on record material....