TaxTMI 
TaxTMI 
2025 (10) TMI 1208
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Customs Act, 1962 and Section 11A [2B] of the Central Excise Act, 1944 and holding that there was no need to issue any show cause notice to the respondent as duty liability and interest thereof is voluntarily discharged by him ? 2{b} Whether in the facts and circumstances of the case as well as material and evidences on record, the Tribunal has committed substantial error of law in holding that the extended period of limitation under section 28 of the Customs Act, 1962 and section 11A of the Central Excise Act, 1944 has been invoked in the case on hand ?" 3. The brief facts of the case are as under: 3.1. The respondent-assessee being 100% Export Oriented Undertaking (EOU) during the period from 01.10.2007 to 23.10.2007 was having letter of permission from the Divisional Commissioner, Kandala Special Economic Zone for manufacture and other operations in bonded warehouse as per the provisions of the Customs Act, 1962. 3.2. The respondent-assessee was also registered with the Jurisdictional Central Excise Authorities and as per letter of permission, it was licensed to manufacture the Refined Petroleum Products, Liquids of Gaseous Fuels, Illuminating Oils or Grease....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mited vide TR-6 challan dated 15.10.2007. (ii) I confirm the demand of interest as due and payable under Section 28AB of Customs Act, 1962 against the said M/s. Reliance Industries Limited, Jamnagar on the Custom duty confirmed at SI. No. (i) above. Further I appropriate the interest amount of Rs. 5,84,69,049/- paid by the said M/s. Reliance Industries Limited vide TR. 6 challan dated 15.10.2007. (iii) I impose penalty of Rs. 179,90,47,660/- (Rupees one hundred seventy nine crore ninety lakh forty seven thousand six hundred sixty only) against the said M/s. reliance Industries Limited., Jamnagar, under Section 114A of Customs Act, 1962. However, in terms of the proviso to Section 114A of the Central Excise Act, 1944, if the duty as determined above and the interest payable thereon under Section 28AB is paid by the said M/s. Reliance Industries Limited within thirty days from the dated of communication of this order, the amount of penalty liable to be paid under this Section shall be twenty five percent of the penalty so determined. In terms of the second proviso to Section 114A of the Customs Act, 1962, the benefit of such reduced penalty under the first proviso s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pellant preferred two Appeals being Appeal No. 485 and 486 of 2011 before the Customs Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (for short 'the CESTAT'). The CESTAT by impugned order dated 13th September, 2012 arrived at the following conclusion : "12. All the above discussion will lead to the conclusion that appellant had definitely not suppressed any material information from the department as regards the consumption of inputs procured, on which the duty liability was forgone by the Revenue and as also clearance of final products to DTA. This also is fortified from the fact that appellant without being informed, on their own paid the entire amount of duty forgone on the inputs along with interest and informed the department on 15.10.2007. In our view, the show cause notice dated 15.4.2008 invoking extended period of limitation for demand of Customs duty under Section 28 of the Customs Act, 1962, Central Excise duty under Section 11A of Central Excise Act, 1944, has not brought forth any situation, wherein it could be concluded that there was a suppression of facts with intention to evade duty on the part of appellant herein. On perusal of the o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her submitted that the Tribunal has further erred in recording the findings on the point of duty liability of the respondent, even though the respondent has conseeded to their legal obligation to make payment of duty and interest to the Department. 4.3. It was pointed out by learned advocate Mr. Utkarsh Sharma that the ratio of the Larger Bench in case of Paras Fab International Versus Commissioner of Central Excise, Kandla reported in 2010 (256) ELT 556 (Tri. LB) followed in the case of the respondent reported in 2011 (268) ELT 38 (Tri. Ahmd) to the effect that there would not be any duty liability on the inputs, would not be applicable in asmuch as it is not admitted by the respondent-assessee for duty liability and payment of duty and interest was made under Section 28 of the Customs Act, 1962. It was therefore submitted that the observations made by the Tribunal are out of context and without jurisdiction. It was submitted that the Revenue has not accepted the above decision relied upon by the respondent-assessee before the Tribunal and Appeals filed by the Revenue are admitted by this Court. 4.4. Learned advocate Mr. Utkarsh Sharma submitted that there was a clear suppre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere used in the manufacture of such finished goods were not eligible for the benefit of exemption on payment of Customs Duty and additional Customs Duty availed under the Notification No. 52 of 2003 as well as exemption from payment of Central Excise Duty availed under the Notification No. 22 of 2003 for the inputs that were locally procured. 4.7. It was therefore submitted that the Tribunal ought to have confirmed the order of penalty levied upon the respondent-assessee in view of the clear suppression of facts at the relevant point of time and merely because the amount of duty was paid with interest subsequently, would not absolve the respondent-assessee from the levy of penalty under Section 114A of the Act. 4.8. Learned advocate Mr. Utkarsh Sharma also invited the attention of the Court to the provisions of Section 114A of the Customs Act, 1962 as well as the provisions of Section 11AC of the Central Excise Act, 1944 to submit that the Tribunal has committed a grave error by setting aside the duty amount which is already paid by the respondent-assessee along with the penalty on the ground that the Adjudicating Authority could not have invoked the extended period of limita....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s cleared from refinery to DTA under 'NIL' rate of duty which is also taken note by the Tribunal. 5.3. It was submitted that as considering the LPG under subsidy scheme, was exempted from Customs Duty as well as Central Excise Duty, no exemption in respect of inputs utilised for the purpose of manufacture of such finished goods would be available to the respondent-assessee and therefore, the respondent-assessee took up the matter on its own for grant of status of deemed export with the authorities and therefore, by letter dated 15.10.2007 paid up the entire duty forgone by it either as input in form of Customs Duty or Central Excise Duty along with interest prior to the issuance of show-cause notices by the Adjudicating Authority. 5.4. It was submitted that in view of the payment of entire duty forgone by the respondent-assessee prior to the issuance of the show-cause notices as per provisions of Section 28(2B) of the Customs Act, 1962, the Adjudicating Authority could not have issued the show-cause notices. It was pointed out that provisions of Section 28(2B) of the Customs Act, 1962 is para-materia with provisions of Section 11A(2B) of the Central Excise Act, 1944 and there....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vice tax prior to issuance of the show-cause notices. It was also submitted that this Court has held that it was not a case of non-payment of service tax with an intent to evade payment of the same and therefore, the question of applying Sub-section (4) of Section 73 of the Finance Act, 1994, which is equivalent to the provisions of Section 28 of the Customs Act, 1962 for invoking the extended period of limitation, would not be applicable in the facts of the present case also. 6. Having heard the learned advocates for the respective parties, considering the submissions made by them as well as on perusal of the impugned order passed by the CESTAT together with the material placed in the paperbook, it appears that it is not in dispute that the respondent during the period under consideration was registered as EOU. The respondent had also imported various inputs and raw-materials for consumption by foregoing the duty liability either of Customs or Excise by procuring CT-3 Certificates and the goods, which were imported/procured duty free were consumed in EOU which is duly recorded in statutory records as per the returns filed by the respondent regularly. 7. The respondent had pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 12. The Tribunal has also taken note of the fact that the respondent computed the interest as per the provisions of Section 28(2B) of the Customs Act, 1962 which provides of discharge of duty and interest by the assessee on his own calculation and intimate the authority, who on being informed could not issue show-cause notice and the only exception would be in case, where the duty liability arises due to misrepresentation or suppression of facts with intent to evade duty. 13. Provisions of Section 28(2B) of the Customs Act, 1962 which existed at the relevant time, reads as under : "Section 28(2B):-Where any duty has not been levied or has been short-levied or erroneously refunded, or any interest payable has not been paid, part paid or erroneously refunded, the person, chargeable with the duty or the interest, may pay the amount of duty or interest before service of notice on him under sub-Section (1) in respect of the duty or the interest, as the case may be, and inform the proper officer of such payment in writing, who on receipt of the such information, shall not serve any notice under sub-Section (1) in respect of the duty or the interest so paid." 14. The Tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a self-destructive action in the light of decision of Larger Bench of Tribunal in the case of Paras Fab International (supra.) 10. We also find strong force in the contention raised by the learned counsel that they had filed monthly returns with the authorities for the month April to Sept.2007 and they had clearly indicated the clearance of LPG in the returns as being cleared to Domestic Tariff Area by claiming exemption under specific notification." 17. The issue of extended period of limitation for the impugned show-cause notice dated 15.04.2008 is concerned, there is a finding of fact arrived at by the Tribunal that the respondent had not suppressed any material information from the Department as regards the consumption of inputs procured, on which the duty liability was foregone by the Revenue and as also the clearance of the final products to DTA which is fortified from the fact that the respondent without being informed, on their own paid the entire amount of duty forgone on the inputs along with interest and informed the same to the Department on 15.10.2007. The Tribunal therefore has rightly held in paragraph No.12 as under : "In our view, the show caus....