TaxTMI 
TaxTMI 
2025 (4) TMI 175
X X X X Extracts X X X X
X X X X Extracts X X X X
....ealed that the appellant had not paid central excise duty on the articles of jewellery manufactured and cleared by them during the period 1.03.2016 to 30.0 6.2017. They were not charging central excise duty from the customers till December 2016. From 01.01.2017, the appellant collected the central excise duty from the customers on the invoices and paid the same under GAR-7 challans, however, they did not file any central excise returns during the period 1.03.2016 to 30.06.2017. The central excise duty liability on the articles of jewellery manufactured and cleared by them, was found to be as under:- CHART Details of excisable sales Assessable Value of Rate of Central Excise Duty Central Excise Duty payable On the basis of Trial Balance/details submitted by PPJ 4,68,88,50,377 1% 4,68,88,504/- On "PENDENT" 10,52,23,867 1% 10,52,239 On invoices having incorrect description 6,45,598 1% 6,456 Exemption claimed twice in respect of 2,88,356 1% 2,884 On invoices having description as 24 CT 3,42,904 1% 3,429 On goods exported without fulfilling the conditions prescribed for export of excisable goods without paymen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... iii). No duty is chargeable on Pendant of 24CT purity as they are items of pure gold having trademark of the appellant which was in the form of gold coins classifiable under 7114 and liable to 'nil' rate of duty under Entry 200 of notification no.12/2012 dated 17.03.2012, which have remained the same, even after substitution of the new Entry 199 imposing central excise duty. iv). The entire sale proceeds of Rs.2,74,28,94,752/- as reflected in the balance sheet and trial balance was the net value realised by the appellant which was required to be treated as inclusive of duty. Appellant is entitled to the benefit of cum-duty as they did not collect any duty from their clients. v). The appellant is entitled to SSI benefit in terms of notifications. SSI benefit has been wrongly denied considering the turnover of 2015-16 as 1198.64 whereas the gold Jewellery became taxable only with effect from 1.03.2016 and in March 2016, the turnover was Rs.1.71 crores only. vi). The entire demand was barred by limitation as show cause notice was issued on 14.11.2019 for the period 1.03.2016 to 30.06.2017, which is after the expiry of period of limitation of two yea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant was not eligible for threshold SSI exemption either for March 2016 (of Rs.85 lakhs) or for the FY 2015-16 FY 2016-17 (of Rs. 15 crores) as their sale of excisable goods for March 2016 was Rs.1.71 crores and for FY 2015-16 was Rs.793 crores. viii). The extended period need not be proved once accepted in view of the decision of the Tribunal in Satya Power & Limited versus Commissioner, Central GST, Central, Excise and Customs, Raipur. ix). Penalty on the appellant under Rule 26 has been correctly imposed in view of his statement. 7. We may first consider the preliminary objection of the impugned order being passed ex-parte without affording sufficient opportunity of being heard. We find that the appellant had neither filed any reply to the show cause notice nor participated in the adjudication proceedings. The personal hearings were fixed on 19.03.2021, 20.04.2021, 29.06.2021, 29.07.2021 and 15.06.2022, however, the appellant failed to appear. In so far as the plea taken with reference to the order of the Supreme Court on COVID-19 pandemic, it needs to be appreciated that time was extended by the Supreme Court only on the issue of limitation and not on the h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he application, had proceeded to argue the matter on merits. After hearing had concluded, the learned counsel filed additional submissions that the impugned order is time barred, being violative of provisions of Section 11A(11) of the Act. That the issue of delay has to be considered in the facts of each case, as to whether there were circumstances or insurmountable exigencies, which makes it impracticable for the adjudication to take place [(M/s. Swatch Group India Pvt. Ltd. Vs. Union of India-2023 (386) ELT 356 (Del.)]. If the appellant wanted to take such a plea, it was incumbent to make specific application giving specific details to show that the adjudication should have been concluded within the prescribed time and the extended period of 7 months taken was un-reasonble and unjustified. Merely making the submissions without any such details deprived the Revenue to contest the same and hence this is one of the reasons that we are not inclined to entertain this plea in the present case. Moreover, the extended period of 7 months is really not enormous more so for the reasons that the period had fallen during the COVID pandemic and there could have been some eventualities in the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... manufacturer or principal manufacturer, as the case may be, from the retails customer; and (c) value of preciaous metal provided by the retail customer. 12. In exercise of the powers conferred by Section 37 of the Act, the Central Government introduced the Articles of ‗Jewelry' (Collection of Duty) Rules, 2016 vide Notification No.34/2016-CE (NT) dated 26.07.2016. Rule 3(f) defined the "Articles" to mean articles of jewelry falling under Heading 7113 and the expression "Articles of Jewelry" shall have the meaning assigned to it under Chapter Note-9 of Chapter 71 of the Tariff Act. 13. The Government of India issued the Circular No.1042/13/2016-CX dated 26.07.2016 simplifying the export related procedures of excise duty on articles of jewellery as under:- "2. In this context, pending finalisation of the procedure for exports, in consultations with the Department of Commerce and trade and industry, (i) There shall be no requirement for taking central excise registration by a manufacturer or principal manufacturer or a jeweller, who exports 100% of articles of jewellery manufactured by him or got manufactured by him on job work basis, subject to the f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4,70,479/- and Rs.4,37,53,388/- respectively, total Rs.10,52,23,867/-. On verification of the invoices submitted by the appellant, it was found that they had wrongly availed the exemption on pendants as they appeared to be articles of jewellery and therefore, query was raised to Shri R.R.Singla as to whether 'pendant' is an article of jewellery or not. To which, he categorically stated on the basis of the invoices that pendant is a kind of locket, which is generally worn in a chain around the neck and is an article of jewellery and exemption was claimed as purity of these items was mentioned as 24 CARAT, which suggested that it was a kind of gold coin. So the contention of the appellant that the goods have been classified as articles of jewellery on the basis of the statement of Shri R. R. Singla is not correct as they were rather based on the invoices produced by the appellant. Apart from this, we find that Rule 3(f) of the Articles of Jewellery (Collection of Duty) Rules, 2016 defines "articles of jewellery" as under:- "3.(f) "articles" means articles of jewellery or both falling under Heading 7113 of the Tariff Act, wherein the expression "articles of jewellery" shal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion claimed by the appellant needs to be examined in the light of the Notification No. 28/2016-CE dated 26th July 2016, whereby amendments were made in the Notification No.8/2003-CE dated 1st March 2003. The relevant contents of the notification are quoted below:- "In the said notification :- (a) In the Table, for serial no.3, and the entries thereto, the following serial number and entries shall be substituted, namely:- (1) (2) (3) 3. First clearances of the articles of jewellery or parts of articles of jewellery or both for home consumption, other than articles of silver jewellery but inclusive of articles of silver jewellery studded with diamond, ruby, emerald or sapphire, falling under Chapter Heading 7113 of the First Schedule upto an aggregate value not exceeding ten crore rupees made on or after the 1st day of April in any financial year, from the whole of the duty of excise specified thereon in the First Schedule: Provided that during the period starting from 1st march, 2016 and ending on 31st March, 2016, the exemption shall apply to the first clearances of the articles of jewellery or part of articles of jewellery or both for home cons....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s added to section 4 w.e.f., 14.05.2003 which provides that when duty is not collected separately, the price actually realised is deemed to be cum-duty price. The Tribunal in Triveni Udyog versus Commissioner of Central Excise, Jaipur - 2017 (358)ELT 950 (Tri.-Del.) was pleased to hold as under:- "12. Claim for cum-duty benefit :The appellants have referred to Board Circular No. 749/65/2003-CX, dated 26-9-2003 claiming cum-duty benefit. For the goods already sold to the customer, it is an accepted principle that the assessee would be entitled to cum-duty benefit as the duty component now cannot be recovered separately from the customers. In other words, the sale price of the goods is to be treated as inclusive of duty component. The Explanation to Section 4(1) of Central Excise Act makes it clear. We, therefore, hold that the appellants are entitled to cum-duty benefit for the subject goods already sold." The aforesaid decision has been affirmed by the Apex Court as reported in 2018 (361)ELT A-80. The present case is squarely covered by the said decision and the appellant is entitled to claim the benefit of cum-duty value. 20. The next issue to be considered is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble on the goods, with such surety or sufficient security, as such officers may approve for the due arrival thereof at the place of export and their export therefrom under Customs or as the case may be postal The manufacturer-exporter may furnish a letter of undertaking in the Form specified in Annexure-II in lieu of a bond." 21. With the introduction of excise duty on articles of jewellery, the Government of India vide Circular No. 1021/9/2016 - CX dated 21st March 2016, constituted a high level Sub-Committee and till finalisation of the recommendations, laid down that, "exporters will be allowed to export on self declaration and submission of LUT to customs without the need to get LUT ratified by central excise, prevailing system will continue." 22. Pursuant to the report made by the Sub-Committee, the Government of India vide Circular no. 1042/30/2016 - CX dated 26 July 2016, simplified the procedure relating to export on articles of jewellery till the finalisation of the procedure for exports. The relevant paragraph of the Circular reads as:- "Subject: Export related procedural simplifications-excise duty on articles of jewellery falling under heading 7113-regard....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in transit and are actually exported, however in the event the goods are not exported, the duty which would be leviable thereon maybe recovered by enforcing the bank guarantee. Coming to the present case, it is an undisputed fact that exports have been physically effected under the supervision of the Proper Officer of Customs and documentary evidence such as invoices and shipping bills have been duly produced by the appellant, however, the appellant has not furnished any Letter of Undertaking/Bank Guarantee/Bond before the Customs or Central Excise authorities. The submission made by the learned Counsel that the goods have been undoubtedly exported stands proved by the documentary evidence and therefore, confirmation of duty demand on exported goods is erroneous, needs to be accepted. It is not the case of the Revenue that the goods have not been exported rather, the only allegation is that the procedure laid down for availing the benefit of exporting the goods without payment of excise duty have not been followed by the appellant while making the export which is contrary to the principle that a substantive right cannot be denied for want of procedural formalities. We therefore,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stomer from any of the branch. In other words, when goods were removed on branch transferred basis no duty was paid. Similarly, PPJ were not discharging any duty on silver sale, gold trading and loose diamonds being exempted from Central Excise duty. iii. Calculation chart showing excise duty liability and interest liability from 01.03.2016 to 31.12.2016 [RUD-7(iii)]. iv. Branch-wise total sales and net sales for Karol Bagh Branch, Sadar Bazar Branch, Chandni Chowk Branch, Pitampura Branch and Gurgaon Branch [RUD-7(iv)]. v. Chart showing export sales from 01.04.2016 to 31.12.2016 [RUD-7(v)]." By 28.11.2017, on the basis of self assessment, the appellant deposited amount of Rs.4,93,99,620/- towards excise duty and therefore vide letter dated 29.11.2017, the appellant requested for closure of investigation by waiver of show cause notice. Further, as asked for by the Department, the appellant vide letter dated 11.06.2018 submitted copies of all invoices (printouts of computer generated invoices) issued by them from all their branches during the period 1.03.2016 to 31.12.2016 for which exemption has been claimed. Considering the conduct of the appellant in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it has been 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. 27. Reiterating the same view, the jurisdictional High Court of Delhi in Bharat Hotels Ltd. versus Commissioner of Central Excise (Adjudication)- 2018 (12) GSTL 368 (Del.) observed that invocation of the extended limitation period under the proviso to section 73(1) does not refer to a scenario where there is an omission or failure to pay duty without the presence of such intention. 28. In the case of Mahanagar Telephone Nigam Ltd versus Union of India & Ors.,W.P.( C) 7542 of 2018 dated 6.4.2023 the Delhi High Court observed that merely because MTNL had not declared the receipt of compensation as payment for taxable service does not establish that it had wilfully suppressed any material fact and therefore, no intent to avoid tax can be inferred by non-disclosure of the receipt in the service tax returns. 29. Following the aforementioned decisions and the dictum that mere suppression of facts is not enough, the Tribunal in a latest d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tention to evade payment of duty. 31. The decision of the Tribunal in Tiger Logistics, India Ltd versus Commissions of Service Tax-III, Delhi-2022 (63) GSTL 337 (T-Delhi) is relevant for considering the conduct of the party. Having noted that the only allegation against the appellant was that they have not disclosed the full value of the taxable service in their ST-3 returns, observed that it is now well established legal principle that suppression of facts is not mere omission, it must be deliberate act with mens rea to suppress and thereby evade, however, the impugned order do not demonstrate the mens rea. The Bench, further observed that the appellant had recorded all the transactions in its records and when called for during investigation, provided full facts to the department based on which the SCN was issued and the appellant did not dispute the demands of service tax which he paid along with interest, even before the show notice was issued. Considering the conduct of the appellant during the investigation in providing all the information and paying the service tax with interest to the extent is not disputed has made out a case for seeking waiver of penalty by invoking Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Legal Metrology before the Hon'ble Bombay High Court and the Bombay High Court directed the Director, Legal metrology to pass a speaking order which the Director, Legal Metrology has done in 2007. The said decision of the Director, Legal Metrology was challenged unsuccessfully by the appellants before the Hon'ble Bombay High Court and the Hon'ble Bombay High Court upheld the decision of the Director, Legal Metrology and held on the products manufactured by the appellants were covered under the Standard of Weights and Measures Act and the Packaged Commodities Rules and the appellants were required to declare RSP on the packages. Thus, the appellants were fully aware of the legal requirements. In spite of such knowledge, the appellant chose not to comply with the law in complete defiance of the law. There was no reason for the appellant to entertain any reasonable belief that they were not required to declare the RSP on the packages. The question is when an appellant deliberately defies a statutory requirement, can they be allowed to get away with it and obtain the benefit under some other law." 34. In view of our findings above on the issue of extended period of limitation, we ar....