TaxTMI 
TaxTMI 
2026 (2) TMI 1266
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....firming duty demands against (i) M/s. Vedagiri Paper and Board Pvt. Ltd. (Appellant-1) and (ii) M/s. Sri Sakthi Paper Mart (Appellant-2). Appellant-1, engaged in the manufacture of unbleached paper under Tariff Item 48043100, was registered with Central Excise since 2010 and was availing SSI exemption under Notification No. 08/2003-CE dated 01.03.2003. During the financial year 2013-14, Appellant-1 cleared goods valued at Rs.1,55,89,925/-, exceeding the exemption limit of Rs.1.5 crores, resulting in a proposed duty liability of Rs.37,612/- on the excess clearances. 1.2 With effect from 01.01.2014, Appellant-1 leased the same factory premises to Appellant-2, who manufactured and cleared unbleached paper valued at Rs. ....
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....e of operations, without fraud or intent to evade. iv. Reliance was placed on: a. Anand Nishikawa Co. Ltd. v. CCE, 2005 (188) ELT 149 (SC) b. Padmini Products v. CCE, 1989 (43) ELT 195 (SC) c. Continental Foundation Jt. Venture v. CCE, 2007 (216) ELT 177 (SC) to contend that mere failure or negligence cannot amount to wilful suppression so as to justify invocation of extended period. v. It was further submitted that penalties under Section 11AC and Rule 25 require deliberate intent, which is absent in the present case. 4. The Ld. Authorized Representative supported the impugned order and submitted that Para 2(vi) of Notification No. 08/2003-CE clearly mandates clubbing of clearances w....
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....5 and Section 11AC are justified? 7. Having identified the points arising for determination, we now take up each issue in sequence in the succeeding paragraphs. 8. We find that the present appeals have been filed seeking setting aside of the orders of the lower authorities with consequential relief. At the time of hearing, the learned Counsel for the Appellants fairly submitted that the contest is confined only to the invocation of the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944 and the imposition of penalties under Section 11AC and Rule 25 of the Central Excise Rules, 2002, and that there is no dispute with regard to the duty liability per se. 9. However, we consider it necessary to briefly a....
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....s: - i. In Kripa Fabs (P) Ltd. v. CESTAT, Chennai, reported in (2015) 59 taxmann.com 157 (Madras High Court), the Hon'ble High Court held that non-payment of duty after crossing the exemption limit itself constitutes suppression at the time of clearance, and subsequent filing of returns or disclosure does not obliterate such suppression. ii. In CCE v. Neminath Fabrics Pvt. Ltd., reported in 2011-TIOL-10-HC-AHM-CX (Gujarat High Court), it was held that the concept of "departmental knowledge" has no place in Section 11A once suppression is established, and extended period is invocable where duty has not been paid due to contravention with intent to evade. iii. The Hon'ble Supreme Court in Candid Enterprises v. CCE, ....
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....ture v. CCE, 2007 (216) ELT 177 (SC), to contend that mere omission or negligence cannot amount to wilful suppression unless accompanied by intent to evade duty. 18. However, we find that those decisions apply where the assessee had made full disclosure of facts and there existed a genuine interpretational doubt. In the present case, Appellant-2 neither obtained registration nor filed statutory returns nor discharged duty liability, despite clearing goods valued at more than Rs.50 lakhs. 19. Further, Appellant-1 being registered since 2010 and having previously complied with excise requirements, cannot legitimately claim ignorance. The leasing arrangement and continued manufacturing activity from the same premises were not intimated, ....