TaxTMI 
TaxTMI 
2025 (7) TMI 1135
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....al No. 76225 of 2019 against the personal penalty imposed on him, which has been upheld in the impugned Order-in-Appeal. 2. Both these appeals emanate from the same Order-in-Appeal and thus, the same are taken up together for decision by way of a common order. 3. The facts of the case are that the appellant no. 1, M/s. Rajcho Pesticides and Chemicals, is a manufacturer of Pesticides, Insecticides, Micronutrients, Herbicides, etc., falling under Chapter 38.08 of the Central Excise Tariff Act, 1985. The appellant no. 1 had been undertaking the manufacturing activity at their factory at Bandipur (North Bandipur), North 24 Parganas, West Bengal- 700119. 4. On 21.01.2015, officers of Central Excise, Anti-Evasion Unit, Kolkata-III Commissionerate conducted search operations at: * The factory premises of the appellant no. 1 at Bandipur * Office premises at A/26/1, Amrabati, Sodpur, Kolkata - 700110 * No. 3 Portuguese Church Street, Kolkata - 700001 5. Joint physical stock verification were conducted in respect of the raw materials of finished goods lying in the factory premises of the appellant no. 1 and the stock of finished goods comprised of PH....
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....shed below : - Year Value of Clearances i.e. the Rate Price mentioned in Tax Invoices(as Balance Sheet) per (in Rs.) Value of Clearances as per MRP printed in the labels (including VAT) (in Rs.) Assessable value after allowing 30% abatement on MRP and SSI exemption (in Rs.) Total Excise duty and E.Cess paid (in Rs.) 2010-11 89,00,615.01 27,041,235.00 39,32,117.00 Nil 2011-12 1,10,46,792.92 26,433,325.00 35,04,532.00 Nil 2012-13 1,26,50,449.39 26,293,715.00 34,05,819.00 Nil 2013-14 1,38,06,711.53 26,904,322.00 38,36,327.00 Nil 2014-15 (till 21.01.15) 1,43,88,697.50 23,778,540.00 16,48,045.00 Nil 8. On completion of the investigation, a Show Cause Notice dated 23.11.2015 was issued to the appellants, inter alia proposing to demand central excise duty of Rs.18,79,918 under Section 11A(4) of the Central Excise Act, 1944, alleging that the appellant no. 1 had manufactured and cleared excisable goods valued at Rs.1,63,26,840/- involving Central Excise duty of Rs. 18,79,918/- without obtaining Central Excise Registration and without payment of central excise duty thereon during the period from 201....
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....ture of the proprietor has also been recorded in paragraphs 8.3 and 11.0 of the said Notice. 10.1. Furthermore, it is contention of the appellants that the investigating agencies have made no effort to establish the existence of unaccounted manufacturing activities; there is no evidence of unaccounted raw materials, stock shortages, discrepancies in raw material or finished goods inventory, excess electricity consumption, unaccounted labour payments, or any interrogation of buyers, transporters, or other parties that might indicate clandestine clearance. The appellants also contend that no incriminating records or documents suggest any flow of unaccounted cash; the entire details were duly recorded in the books of accounts and VAT was paid by the appellant no.1. The appellants submitted that they were under the bona fide impression that excise duty was not payable as their value of clearances during all the five years were below the threshold limit of 1.5 crores. Thus, the appellant submitted that the allegation of clandestine clearance is not sustainable. 10.1.1. Reliance in this regard is placed by the appellants on the following judicial precedents wherein it has been held....
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....ed more than one year after the search conducted on 21.01.2015. She thus submits that considering the argument that the extended period is not invocable, only clearances from the period from November 2014 to 21.01.2015 (the date of search) would be covered within the normal limitation period of one year; that the bona fide belief on the part of the appellants that goods are not dutiable cannot constitute suppression of facts warranting invocation of extended period. 10.3. In view of the above, it is the contention of the Ld. Counsel for the appellants that the demand confirmed in the impugned order by alleging clandestine clearance and invoking the extended period of limitation, is not sustainable. 10.4. Regarding the imposition of penalties, it is argued by the Ld. Counsel for the appellants that the imposition of penalty on the appellant no. 1 under Section 11AC of the Central Excise Act, 1944 is not sustainable in this case as none of the ingredients necessary for levy of penalty under Section 11AC of the Act read with Rule 25 of the said Rules exist in the instant case. Accordingly, she prayed for setting aside the penalty imposed on the appellant no. 1. With regard to th....
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....e ground that the appellant no. 1 had not obtained central excise registration and evaded payment of central excise duty by wilful suppression of facts from the Department. In this case, I find that a joint physical stock verification were conducted in respect of the raw materials and finished goods lying in the factory premises of the appellant no. 1. The goods were detained for the purpose of further verification with their private records. On verification, it was found that the stock of finished goods tallied with the stocks recorded in their private stock register. Thus, I find that the appellant no. 1 has maintained proper records of their manufacturing and clearance activities and there was complete transparency in the business operations of the appellants. 13.1. These facts are admitted by the investigation and recorded in the below-mentioned paragraphs of the Show Cause Notice: A. Complete transparency in business operations: Para 3.2 of SCN: "Scrutiny and cross examination of the stock detained as per the detention memo with that of the stock of finished goods as recorded in their private stock register marked as Annexure-A, did tally and therefore ....
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....unaware of the fact the Central Excise duty was liable on our products on MRP price. However, soon after your visit we have paid the Central Excise duty dues through net banking after obtaining Central Excise registration." 13.2. From the above, I find that the appellants have not suppressed any information before the Departmental authorities and there was a complete transparency in the business documents of the appellants. Further, the appellants have also properly maintained the books of accounts, followed proper VAT compliance and commercial invoicing in respect of their clearances. These facts have been admitted by the investigation in the show cause notice itself. Thus, I hold that suppression of facts with an intention to evade the tax has not been established in this case. 13.3. Regarding non-payment of central excise duty after crossing the threshold exemption limit of Rs. 1.5 crores, I find that the appellant no. 1 have submitted that they were under the bona fide belief that their value of clearances, in all the financial years, were less than Rs.1.5 crores and accordingly, did not pay central excise duty on the goods manufactured and cleared by them, as th....
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....ndertaken by the appellants were with any mala fide on their parts. Merely because the appellant did not inform the department, by itself cannot be made a ground to attribute them with any mala fide or deliberate suppression with an intent to avoid payment of duty. When the said trading activities being reflected in the statutory records and in the returns filed with the sales tax authorities, it cannot be held that there was any intent to evade payment of duty, on the part of appellants. We accordingly hold that the demand is also hit by bar of limitation." 15.1. From above discussions and the decision cited supra, I find that the demand confirmed in this case by invocation of the extended period of limitation is not sustainable. However, it is a fact that the appellant has not disputed the duty liability for the extended period of limitation before the Commissioner (Appeals) and disputed only the penalty imposed on both the appellants. Thus, even though the extended period of limitation is not invokable in this case to confirm the demand of duty, I am not going into the merits of liability of duty confirmed for the extended period of limitation, as the said issue was not part ....