TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 388
X X X X Extracts X X X X
X X X X Extracts X X X X
....ules 2002, Rule 5 of the Central Excise (Removal of Goods at Concessional Rate of duty for manufacture of Excisable Goods) Rules, 2001 and also provisions of Notification No. 29/2004-CE dt. 9.7.2004, 30/2004-CE, dt. 9.7.2004 & 43/2001- CE(NT) dt. 26.6.2001 (Annexure Procedure). iii. M/s. PSPL are availing CENVAT credit on a portion of the Viscose Staple Fibre and clear Man Made Fibre yarn on payment of duty as per Notification No. 29/2004-CE dt. 09.07.2004 as amended, to (1) local market, (2) for Export under claim for Rebate and (3) clear yarn without payment of duty for Export under Bond. For the remaining portion of the raw materials, they do not avail CENVAT credit, but clear the yarn without payment of duty by availing exemption under Notification No.30/2004-CE dt. 1.3.2004 as amended. iv. Since January 2011, they had procured VSF fibre under Annexure without payment of duty (Notification No.43/2001-CE (NT) dt.26-06- 2001) and exported the yarn. v. In their Form IV Register they are maintaining separate stock account for each fibre under three categories, viz. a) "LOCAL": with reference to home clearance without payment of duty under Notifn.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e normal period a duty of Rs. 1,06,18,580/- as detailed above as quantified in as detailed in the notice should not be demanded from them under erstwhile Section 11A(1), Section 11A(4), of the Central Excise Act 1944 read with the relevant rules of the Central Excise Rules. iii. That appropriate interest should not be demanded under Section 11AA of the Central Excise Act and, iv. That penalty under Rule 25 of Central Excise Rules and Section 11AC of the Central Excise Act should not be imposed for contravention of the various rules indicated earlier. 4. The Appellant vide their reply dated 15.12.2014 refuted the above allegations on the following grounds: - i. That the shortage arrived by the Department at 4,78,637.126 Kgs (4,18,368.988 Kgs + 60,268.138 Kgs) is an assumed figure and department had failed to consider work in process stock while arriving at the final stock. ii. That Department failed to consider usable waste stock in process which was issued for production purposes. iii. That Department while issuing the notice in Para 4(ii) had mentioned that presumably a quantity of 60268.13 kgs has been diverted for local sale withou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....25 of Central Excise Rules, 2002. 6. Aggrieved by the aforesaid impugned order dated 26.12.2014, the Appellant has filed this appeal before this Tribunal. 7. The Ld. Advocate Mr. M.N. Bharati have argued for the Appellant and submitted as follows: - i. That demand is based on presumptions and assumptions. ii. That Appellant explained to audit officials about usage of usable waste which will be mixed with original fibre for manufacture of domestic yarn as requirement of less quality yarn in the domestic market is much higher and usage of usable fibre will be cost effective, iii. That the wastage of 455,653.80 kgs of VSF is an inherent and unavoidable outcome of the yarn manufacturing process which is subsequently used for production of domestic yarns. Such utilization is an acceptable industry practice. iv. That shortage of 4,78,637.126 kgs mentioned in show cause notice is based on assumption and does not account for opening stock, work in process stock and usable wastage. v. That the entire demand is barred by limitation as there was no suppression of facts, willful misstatement or intent to evade duty. In support of this, relianc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd returns filed by the Appellant. It is not the Department's case that the Appellant failed to file returns. In the present case, the Appellant has regularly filed its returns with the department. The fact that the Department could not detect the alleged short payment until audit only reflects an omission on the part of the Department in timely scrutinizing returns and not suppression by the assessee. 13. In this regard, we find that the Appellant on 07.11.2011, itself, has replied to an Audit Observation establishing that these facts were within the knowledge of the Department. Whereas the show cause notice in the present case has been issued only on 17.04.2014, beyond the normal period of limitation. Therefore, when these facts were clearly within the knowledge of the Department there cannot be any scope for the department to plead that the assessee is guilty of wilful misstatement or suppression of facts with an intent to evade payment of duty. 14. In this connection, it would be appropriate to refer to the decision of the Principal Bench of this Tribunal in the case of Maruti Udyog Ltd. v. CCE reported in 2002 (147) ELT 881 (Tri-Del), wherein the Tribunal followed th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icals Industries [2014 (310) ELT 441 (All.)], wherein it has been held as under: "6. Having considered the judgment of the Tribunal, we see no reason to interfere with the finding of fact that if a scrutiny had been made by the Range Officer of the ER-1 returns, that would have revealed that the assessee had cleared its MS tanks and radiators to the owning company for the manufacture of transformers. This indicated that there was no fraud, collusion, misstatement or suppression of facts. Besides, since the situation was revenue neutral, no intent to evade the payment of duty could be ascribed to the assessee. Once, there was no intent to evade the payment of duty, the Tribunal was justified in coming to the conclusion that the extended period of limitation under the proviso to Section 11A(1) of the Act, would not be attracted. Hence, no substantial question of law arises in the appeal. It is, accordingly, dismissed." 19. Additionally, the law on invocation of extended period of limitation for the purpose of recovery of tax dues is settled. The Hon'ble Supreme Court in the case of Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay [1995 (78) E.L.....