TaxTMI 
TaxTMI 
2026 (9) TMI 1997
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....t vehicle under chapter sub-heading 87079000 of CETA, 1985. (iii) I order to classify the Parts and accessories of Body of the Motor Vehicle 'TATA MAGIC' manufactured by the Noticee No. 1 under chapter sub-heading 87082900 of CETA, 1985. (iv) I order to deny the exemption under Notification No 12/2012-CE dtd. 17.03.2012 claimed by the Noticee No. 1 on the goods mentioned at S.No (i), (ii) and (iii) above including certain goods of chapter heading 8702 as per para 23.8 above. (v) I hereby order to drop the demand of Rs. Rs. 5,94,52,082/-(Rupees Five Crores Ninety Four Lacs Fifty Two Thousand Eighty Two only) (including Education Cess & Secondary & Higher Education Cess) as per para 23.8 above. (vi) I hereby confirm and order recovery of Central Excise duty amounting to Rs. 1,39,40,715/- (Rupees One Crore Thirty Nine Lacs, Forty Thousand Seven Hundred Fifteen Only) (including Education Cess & Secondary & Higher Education Cess) under Section 11A(10) of the Central Excise Act, 1944 from the Noticee No.1 for the period from 01.05.2012 to 31.03.2017 as per para 27.2 above. (vii) I order recovery of interest on amount at (vi) above in t....
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....5 870810 Bumpers and parts thereof 87081090 Other. 2.3 The text of entry No 276 of the Notification No 12/2012-CE, benefit of which was being claimed by the appellant is reproduced below along with the associated condition. S.No Chapter or heading or sub heading or tariff item of the 1 schedule Description of excisable goods Rate Condition No 276 87 (i) Motor Vehicles principally designed for the transport of more than six persons, excluding the driver, including station wagons; and (ii) Motor vehicles for transport of goods (other than those specially designed for the transport of compressed or liquidized gases) falling under heading 8704; and (iii) Three wheeled motor vehicle. Nil 27 Condition No Conditions 27 If manufactured out of Chassis falling under heading 8706 on which duty of excise has been paid and no credit of duty paid on such chassis and other inputs used in the manufacture of such vehicle has been taken under rule 3 or rule 13 of the CENVAT Credit Rules, 2004: Provided that this exemption is not applicable to a manufacturer of said vehicles (a) who is manufacturing such vehicle on a chassis supplie....
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....hapter subheading 87079000 of CETA 1985. iii. The parts of accessories of Body of the Motor Vehicle 'TATA MAGIC' manufactured by the notice no. 1 should not be classified under chapter subheading 87082900 of CETA 1985. iv. Exemption under notification no. 12/2012- CE dated 17.03.2012 supra claimed by the Notice No 1 on the goods mentioned at S. No. i, ii and iii above concluding the goods of chapter subheading 8702 should not be denied to them. v. Central Excise Duty amounting to Rs. 7,33,59,261/- (Rupees seven crore thirty three lakh fifty nine thousand two hundred sixty one only) (including Education Cess & Secondary & Higher Education Cess) not paid by Notice No 1 during the period 01.05.2012 to 31.03.2017 should not be demanded and recovered from the Notice No 1 under Section 11A (4) of the Central Excise Act 1944. vi. Penalty should not be imposed upon Notice No 1 under Section 11AC of the Central Excise Act 1944 as it existed during the relevant period read with Rule 25 of the Central Excise Rules,2002. vii. The Notice No 1 is also informed that in the event of confirmation of the above demand, Section 11AB of the Act regarding int....
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....ed. There is no suppression on the part of the appellants. Burden is upon the department to prove any allegation. As submitted above: o the appellants are engaged in body building business on the chassis etc. since 1985. ○ From last more than 30 years they are registered with Central Excise department, filing their statutory returns. ○ The appellants clearly mentioning their activity in their returns and claiming exemption of Notification No. 12/2012 -CE dt.17.03.2012. ○ Audit was conducted by Central Excise department for 201213 to 2014-15 in December 2015. For 2015-16 audit conducted on 17.11.2016. No such objection was raised. ○ Show Cause notice is dated 25.05.2017, hence demand for the period prior to 14.05.2016 is time barred. ➢ Appellant 1 did not contravene any provision of law hence penalty imposed is not sustainable. ➢ Penalty imposed upon Appellant 2 under Rule 26 is not legal and not sustainable. 3.3 Authorized representative submit as follows: ➢ Invocation of Extended Period of Limitation ○ Demand for the period from May 2015 to March 2017 is wi....
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....admissible. ○ Accordingly, demand of Rs. 1,02,36,434/- was confirmed by the Adjudicating authority. ➢ Modification of fully built Vehicle does not amount to manufacture of vehicle. ○ Where body is mounted on a fully built motor vehicle (Chapter 8704) and not on chassis of heading 8706, the activity does not amount to manufacture of motor vehicle; it results only in manufacture of body. ○ As per Chapter Note 5 of CETA, mounting of body amounts to manufacture only when done on chassis of heading 8706. Since the body was mounted on fully built vehicle, it does not qualify as manufacture of motor vehicle. ○ Garbage Tipper Body/Container Body/Tipper Body mounted on fully built vehicle is correctly classifiable under 87079000 (Body of Motor Vehicle) and not under 87059000/87042120/87041010 as done by the appellant. ○ Since the final product is body of motor vehicle and not motor vehicle manufactured out of chassis (8706), exemption under Notification No. 12/2012-CE is not available. ➢ Demand of Rs 25.61 lakhs on fiber resin side panel, steel doors and aluminum window. χ....
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.... corresponding value in respect of these retained items has been suppressed by the appellant, resulting in undervaluation on this account. Therefore, the applicable duty amount of Rs. 8.23 Lakhs is payable by them. ➢ Appeals be dismissed 4.1 We have considered that the impugned order along with submissions made in appeal and during the course of arguments. 4.2 Impugned order record as findings as follows: "23. I find from the allegations made in the Show Cause Notice and the defense of the Noticees that the main issues to be decided here are:- (i) Whether Central Excise duty is payable on building of body on duty paid Chassis, classifiable under chapter sub-heading no. 87029099 of CETA, 1985 in terms of Notification No. 12/2012- CE dated 17.03.2012; (ii) Whether the Garbage Tipper Motor Vehicle manufactured by them on the chassis (of vehicle 'TATA ACE') of chapter heading 8706 is classifiable under chapter subheading 87042190 of CETA, 1985; (iii) Whether the Garbage tipper Body/container body/Tipper/High Deck Body mounted on the fully built vehicle are classifiable under chapter subheading 87079000 of CETA, 1985 resp....
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....culated above. On the contrary, as the Noticee No. 1 has succeeded in proving that they fulfilled two prime conditions of Notification No. 12/2012-CE dated 17.03.2012 for availing exemption from duty by showing that the chassis received by them were of chapter heading 8706 and that the duty has been paid on it, they are entitled to exemption under Notification No. 12/2012-CE supra, hence, the remaining demand of Rs. 5,94,52,082/-(Rs. 5,97,37,893/- as per Annexure-A1 of SCN - Rs. 2,85,811/- as calculated above) is hereby dropped. I hold accordingly. 25.1 As regards the issue of classification of the Garbage Tipper Motor Vehicle manufactured on the chassis (of vehicle TATA ACE) of chapter heading 8706 and classification of the Garbage Tipper Body/Container Body/Tipper Body/High Deck Body mounted on the fully built vehicle and exemption of the same under Notification No. 12/2012-CE dated 17.03.2012, the Noticee No. 1 submits that they have built body on chassis of Motor Vehicle -Tata Ace falling under chapter sub heading 8706 of CETA, 1985. After receiving chassis, the Noticee has mounted 'Garbage Tipper Body' on it. Resultant Motor Vehicle is classifiable un....
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....some cases, they have received chassis of the motor vehicle "TATA ACE' falling under chapter subheading 8706 of the Central Excise Tariff Act, 1985. Both, the fully built TATA ACE and its Chassis are received from the Factory of M/s TATA Motors Ltd, Uttrakhand without payment of duty availing Area based exemption. They have built 'Garbage Tipper body on the motor vehicle/chassis so received by them. The process of manufacture of 'Garbage Tipper Body' on the chassis of chapter subheading 8706 and that on the motor vehicle falling under chapter subheading 8704 has been described by Shri Narain Sumrani ( the Noticee No 2) in his statement dated 10.04.2017 as under: (i) Manufacture of Garbage Tipper Body on Chassis of the Motor Vehicle: - For this body they first build sub frame on the main chassis which increases the height for the body enabling fitment of the hydraulic kit. The sub frame is made from two M S angles parallel to each other and mounted on the main chassis. On this sub frame, they mount the garbage body which is made by fabrications of sheet. The garbage body is built separately as per specifications given by the said dealer and hydrauli....
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....body on motor vehicle of chapter heading 8704, it is clear that the Noticee No. 1 had misclassified the final products under chapter sub-heading 87059000 as the body was not mounted on the chassis of heading 8706 but was mounted on the motor vehicle of chapter 8704 and as per chapter Note 5 of the first schedule to the CETA 1985, the mounting of body on chassis of 8706 amounts to manufacture of a motor vehicle. Therefore, the Noticee had not manufactured motor vehicle but had manufactured Body of the Motor Vehicle. There is a specific sub-heading 8707 of CETA, 1985 for the bodies for motor vehicle of headings 8701 to 8705. As the Garbage tipper body/Container Body so manufactured by the Noticee No. 1 is for motor vehicle of heading 8704, the same is more specifically classifiable under chapter subheading 87079000 of CETA, 1985. Moreover, the manufacturing process of the said Garbage Tipper Body indicates that the same is first manufactured by fabrication and then it is mounted on the vehicle. Therefore, independent existence of the body occurs before mounting it on the vehicle. This independent body is the body for motor vehicle of chapter heading 8704 which clearly falls under cha....
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....t available to the Noticee No 1 on the Body (Garbage Tipper body/container) of motor vehicle falling under chapter subheading 87079000 of CETA 1985 (the Noticee has wrongly classified it under chapter heading 87059000) mounted on the motor vehicle of chapter heading 8704 as the same has not been manufactured out of chassis. 25.6 It is alleged in the SCN that Exemption under Notification No. 12/2012 supra is not available to the Noticee No. 1 on the Motor Vehicle falling under chapter subheading 87042190 of CETA, 1985 (the Noticee has wrongly classified it under chapter heading 87059000) manufactured out of chassis of chapter heading 8706 as no duty has been paid on the said chassis. In this respect, it is submitted by the Noticee No. 1 that product is chargeable to duty but government has allowed areas-based exemption hence the same is to be considered as duty paid. Noticee's contention in this regard is correct hence, goods cleared under area-based exemption are to be considered as duty paid. But, ever in this situation also, Noticee No. 1 is not going to get the benefit of exemption Notification No. 12/2012-CE as there are following basic requirement for availing the....
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....ticee No. 1 had not manufactured motor vehicle but had manufactured Body of the Motor Vehicle. There is a specific sub-heading 8707 of CETA, 1985 for the bodies for motor vehicle of headings 8701 to 8705. Even in the case of Dilip Chhabria Disigns Pvt Ltd, it is held by the Cestat that fabrication of any body or mounting of equipment on chassis should not be undertaken whereas in the instant case, body of the motor vehicle is fabricated and mounted on the motor vehicle. Hence, ratio of the decision of the above Cestat order would not apply to the facts of the present case. 25.8 In view of the above discussions and as per the details shown in Annexure A2, A3 & A4 of the SCN, the Noticee No. 1 is liable to pay the following Central Excise duty on the goods of chapter subheading 87042190 or 87079000 (which had been wrongly classified by the Noticee No. 1 under chapter subheading 87059000/87041010/ 872042120 of CETA 1985): Goods Classified by Notice No 1(Chapter subheading CETA 1985) of Actual Classification of goods (Chapter subheading of CETA 1985) Central Excise duty including Ed Cess & Sec& Hr. Ed Cess Annexure 87059000 87042190 or 87079000 a....
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....ainted and then Aluminum Sliding Window is fitted on it. The Noticee No. 1 has classified the same under chapter sub-heading 87081090 which appears to be wrongly classified by them as the said heading refers to the Bumpers and parts of motor vehicle other than tractors. The goods manufactured by the Noticee are certainly not the Bumpers and parts thereof. In fact the said goods are classifiable under chapter heading 87082900 as 'other parts and accessories of bodies other than seat belts'. The goods side panel, steel doors, aluminum windows are nothing but parts/accessories of the body of the vehicle TATA Magic' and therefore are correctly classifiable under chapter sub-heading 87082900 of CETA, 1985. The exemption under Notification No. 12/2012 supra claimed by the Noticee No. 1 for these goods is not available by any stretch of imagination as firstly these are not motor vehicle and secondly, they are not mounted on chassis of heading 8706 and these two conditions are the prime requirement to avail the said exemption Notification. 26.3 In view of the above, it may be concluded that: A. The Noticee No. 1 had misclassified the Parts and accessories of Body of th....
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....en there is no question of undervaluation. Noticee placed reliance on few decisions in their favour. 27.2 The Noticee No.1 received Fully Built Vehicle TATA ACE' for mounting the Garbage Tipper Body on it. The process of mounting the Garbage Tipper Body on the said vehicle has been explained by Shri Narain Sumrani in his statement dated 10.04.2017 recorded under Section 14 of the Central Excise Act, 1944. He stated that they remove the side panels and the flooring sheet and use these for making the sub frame so that height increased for fitment of hydraulic kit and garbage body. From the averment of Shri Narain Sumrani, it is clear that the side panel and flooring of the fully built vehicle are used by them and are not returned back to the supplier of the said Vehicle. The money value of the same is the additional consideration received by the Noticee No. 1 from the supplier of the Vehicle i.e M/s Sanghi Brothers (Indore) Pvt Ltd. Therefore, the price charged for the said Garbage Tipper Body by Noticee No. 1 is not the sole consideration in terms of Section 4 of the Central excise Act 1944. Therefore, the value of side panel and floor of the said vehicle is required to....
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.... (2) (3) (4) (5) (6) (7) May, 2012 to February, 2015 157 0 157 27082.50 1245795 153980 March, 2015 to March, 2017 923 248 675 116437.50 5356125 669516 TOTAL 1080 248 832 143520 6601920 823496 27.3 In view of the above discussions and above chart, the Noticee No. 1 is liable to discharge their Central Excise duty liability of Rs. 8,23,496/- on this count for the period from May, 2012 to March, 2017. 28.1 As per the discussions made in preceding paras, it is clear that the Noticee No. 1 has manufactured and cleared their finished goods namely Bodies of Motor Vehicle under chapter sub-heading no. 87079000 and Motor Vehicle falling under chapter sub-heading no. 87029099/87042190 manufactured out of non duty paid chassis of chapter heading no. 8706, without payment of duty by wrongly availing the exemption under Notification No. 12/2012-CE dated 17.03.2012 in contravention of the following provisions of Central Excise Act, 1944 and Rules fra med thereunder: i) Section 4 of the Central Excise Act, 1944 in as much as they have undervalued the value of th....
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....081090) Chapter Parts and accessories of Bodies excluding safety belts. (87082900) 25,94,974 Annexure A5 6 Undervaluation 8,23,496 Para 12.4 above TOTAL 1,39,40,715 29.1 The Noticee No. 1 submits that extended period of limitation is not applicable as there does not exist any of the ingredients of proviso 4 to Section 11A of the Central Excise Act, 1944 and there is no suppression involved in this case. Exemption was claimed in ER1 returns filed time to time and regular audits have been conducted by the department. So, there is no suppression involved and extended period cannot be invoked. Noticees also submitted that imposition of penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 & 26 of Central Excise Rules, 2002 is not justified as there was no malafide intention on the part of the Noticees. They placed reliance on various case laws in their support. 29.2 In this case, I find that the Noticee had wrongly availed the exemption under Notification No 12/2012-CE dated 17.03.2012 by misclassifying the final products, undervaluation of the same and without satisfying the con....
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.... 29.3 In view of the above, I find that the above act of the Noticee No.1 certainly amounts to willful sup pression. In this regard, reliance is placed on the following judgments:- The Hon'ble Supreme Court in the case of PASUPATI SPINNING & WEAVING MILLS LTD. Versus COMMR. OF C.EX., CHANDIGARH 2015(318) E.L.T. 623(S.C.) held that:- "As it is clear that the sewing threads is not put up on a support, CESTAT is clearly right on merits. Equally, we do not think that there is any ground for interference on the extended period of limitation being applicable ins as much a CESTAT is again correct in saying that as the declaration and RT-12 returns being vital documents submitted by the respondent (appellant herein) did not mention that vital words "hanks", they suppressed a material fact which, to their knowledge, would not bring their sewing thread within the exemption Notification. For all these reasons, we find no merit in these Appeals. The Appeals are, accordingly, dismissed, without any order as to costs" The Hon'ble Apex Court in the following decisions also up held the suppression of facts:- (i) PHAARMASIA LTD., Versus COMMISSIONER OF C....
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....de duty, I hold that they have rendered themselves liable to penalty under Section 11AC of the Act. In this regard, draw support from the following case laws:- (i) The larger Bench judgement of the Hon'ble Supreme Court in the case of Union of India Vs Dharmendra Textile Processors 2008 (231) ELT 3 (SC) (ii) The larger Bench judgement of the Hon'ble Supreme Court in the case of Punjab Tractors Ltd. Vs. Commissioner of Central Excise Chandigarh 2005 (181) ELT 380 (SC). The above judgments of the Larger Benches of the Hon'ble Apex Court will prevail over the decisions cited by the Noticee No.1 and settle the Legal position that the penalty and interest is applicable in case of confirmed demand and mensrea is not essential for imposition of penalty in case of duty not paid /short paid. 29.5 As the Noticee No.1 had wrongly availed the exemption under Notification No. 12/2012-CE dated 17.03.2012 by misclassifying the final products, undervaluation of the same and without satisfying the condition of the said Notification, I am of the considered opinion that the Noticee is liable to penalized under Section 11AC of the Central Excise Act, 194....
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.... is a civil liability of an assessee who has retained amount of public exchequer with himself and which ought to have gone in the pocket of Central Govt. much earlier or in other words interest on tax/duty late paid /short paid/not paid is payable and the same is compulsory even though there is no malafide intention. It is a settled principle of law that when an assessee is supposed to pay the tax / duty on the due date fixed and on the date tax / duty is not paid or less paid then definitely when it is paid on a later date the interest liability automatically accrues. Here to throw more light on the issue of interest, I would like to quote the decision given by Constitution Bench of Hon'ble Apex Court in case of Central Bank of India vs Ravindra and others reported in 2002 (1) SCC 367 which laid down the hearing and concept of the word "interest" their lordship at Para 37 held as under:- "Black's Law Dictionary (7th Edn.) defines "interest" inter alia as the compensation fixed by agreement or allowed by law for the use or detention of money, or for the loss of money by one who is entitled to its use; especially, the amount owed to a lender in return for the use of....
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...., belonging to another, or for the delay in paying money after it has become payable". It is the appeal against this decision of the Punjab High Court which was dismissed by the Supreme Court in Dr. Sham Lal Narula case". (Emphasis supplied). " In the light of the above facts, I am of the firm opinion that interest charged is a civil liability and is a charge for the use or forbearance of money which is liable for payment. Noticee by availing and utilizing the amount of erroneous refund rendered themselves liable for interest at the applicable rates and I hold accordingly. 31. In view of the above, I conclude the discussion and findings that:- (b) The correct classification of the Garbage Tipper Motor Vehicle manufactured by them on the chassis (of vehicle 'TATA ACE') of chapter heading 8706 will be under chapter sub-heading 87042190 of CETA, 1985. (c) The correct classification of the Garbage tipper Body/Container Body/Tipper/High Deck Body mounted on the fully built vehicle will be under chapter sub-heading 87079000 of CETA, 1985. (d) The correct classification of Parts and accessories of Body of the Motor Vehicle 'TATA MAG....
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....in which they are cleared. Reliance is placed on the decisions in the case of Sarita Chemicals Ltd. [2000(119) ELT 394 (Tribunal)] and other decisions on the subject. In the case of Satnam Overseas Ltd. [2015 (318) ELT 538 (SC)], held that mere addition of value is not sufficient to conclude that the manufacture has taken place. In the present case appellant had received fully built motor vehicle and have after certain modification carried out by them cleared the same again to their customers. If it is to be assumed that appellant has cleared the these fully built motor vehicles then it is to be established that appellant has started with something other than fully built motor vehicle for purpose of treating the activities undertaken by the appellant to be amounting to manufacture. Otherwise appellant has just undertaken the activities of refining, remaking of the existing fully motor vehicles and cleared and such activities of refining and remaking whether shall amount to manufacture as has been defined by Section 2 (f) of the Central Excise Act, 1944 read along with various decisions of the Hon'ble Supreme Court should be the first point of determination. Impugned order do not de....
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....cle shall become liable for tax twice over as chassis alone has been made liable for excise as a separate item under Heading No. 87.06 at a particular rate, while the motor vehicle have been excised separately under Heading Nos. 87.02 to 87 04. The basic terra-firm a of the Notification meaning that bodies have been independently excised. The reason deployed by the appellant to the effect that building of a body on the chassis itself amounts to manufacture of a motor vehicle is bereft of any substance. Any single act in the process of manufacturing an end-product cannot possess the attributes of production of the end-product. The only conclusion that can be drawn is that the body building is not the same as the manufacture of complete motor vehicle. It may be a link in the whole process and the Legislature has taxed it as an independent item. It is not unknown that in order to encourage subsidiary industries and the small scale units, the Legislature thinks it proper to exempt . such industries or units from the excise duty. However, they still kept the impost if the body is built as part of the integral process of manufacturing the vehicle. It is not disputed that in the trade bod....
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.... audited from time to time as prescribed. The appellant was clearing the same/ similar goods after undertaking these processes in past also, without any question objection by the revenue authorities. Just for the reason that authorities had changed their opinion in respect of the clearances made by the appellant, appellant cannot be said to be suppressing the facts with intention to evade payment of central excise duty. For the long-standing period adopted by the appellant undisputedly they entertained a bonafide belief that these good cleared by them where exempt from payment of duty. There can be no case for invoking the extended period of limitation for making this demand. Hon'ble Supreme Court has in the case of Stemcyte India Therapeutics Pvt. Ltd. [Order dated 14.06.2025 in Civil Appeal Nos. 3816-3817 OF 2025] held as follows: 9. In the present case, the disputed period is from 01.07.2012 to 16.02.2014. However, the show cause notice was issued only on 28.07.2017, demanding a sum of Rs.2,07,29,576/- towards service tax, by invoking the extended period of limitation. Under section 73(1) of the Finance Act, 1994, a show cause notice must ordinarily be issued within one....
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....rt observed that in order to sustain an order of the Tribunal beyond a period of six months and up to a period of five years in view of the proviso to subsection (1) of Section 11-A of the Act, it had to be established that the duty of excise had not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. It was observed by this Court that something positive other than mere inaction or failure on the part of the manufacturer or producer of conscious or deliberate withholding of information when the manufacturer knew otherwise, is required to be established before it is saddled with any liability beyond the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal, however, had held contrary to the contention of the appellant. The Tribunal ....
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....e obliged to take out a licence. The failure to take out the licence and thereafter to take the goods out of the factory gate without payment of duty was itself sufficient, according to Shri Ganguly, to infer that the appellant came within the mischief of Section 11-A of the Act. We are unable to accept this position canvassed on behalf of the Revenue. As mentioned hereinbefore, mere failure or negligence on the part of the producer or manufacturer either not to take out a licence in case where there was scope for doubt as to whether licence was required to be taken out or where there was scope for doubt whether goods were dutiable or not, would not attract Section 11-A of the Act. In the facts and circumstances of this case, there were materials, as indicated to suggest that there was scope for confusion and the appellant believing that the goods came within the purview of the concept of handicrafts and as such were exempt. If there was scope for such a belief or opinion, then failure either to take out a licence or to pay duty on that behalf, when there was no contrary evidence that the producer or the manufacturer knew these were excisable or required to be licensed, would not a....
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....In support of its claim the respondent produced classification list approved by the authorities during the period 1978-79, and also produced extracts from the survey register showing that the officers had been visiting its factory from time to time and also taking note of the previous goods manufactured by the respondent. The plea of the Revenue was that there was suppression and/or mis-declaration and/or wrong information furnished in the declaration itself. The Tribunal noted the facts as follows: "We observe it is not denied by the Revenue that the appellants had been submitting their classification lists from time to time showing the various products manufactured by them including those falling under T.I. 14E and 68 also these containing alcohol. The officers who visited the factory as seen from the survey register at the factory also took note of the various products being manufactured by the appellants. It cannot be said that the appellants had held back any information in regard to the range and the nature of the goods manufactured by them. The appellants have maintained that the value of the exempted goods under T.I. 68 and also value of medicines containing alcoho....
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....n the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before (sic beyond) the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts referred to hereinbefore do not warrant any inference of fraud. The assessee declared the goods on the basis of their belief of the interpretation of the provisions of the law that the exempted goods were not required to be included and these did not include the value of the exempted goods which they manufactured at the relevant time. The Tribunal found that explanation was plausible, and also noted that the department had full knowledge of the facts about manufacture of all the goods manufactured by the respondent when the declaration was filed by the respondent. The respondent did not include the value of the product other than those falling unde....
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....laration or otherwise. They responded to each and every query of the appellant, as and when called upon to do so. The authorities of the appellant must have verified the said disclosures. At least they are expected to do so. The disclosure made by the respondent was acceptable to them. Their bona fides were never questioned. 15. The applicability of the extended period of limitation is, therefore, required to be considered in the aforementioned context. The proviso, it is trite, provides for an exception. It is not the rule. A case, therefore, has to be made out for attracting the same. 16. In Primella Sanitary Products (P) Ltd. v. CCE [(2005) 10 SCC 644 : (2005) 184 ELT 117] a three-Judge Bench of this Court was dealing with a case where a concession was made by a counsel appearing on behalf of the Revenue. The Court opined that although the item was put under the right classification list but they had not been permitted to take a different stand stating: (SCC p. 648, para 13) "As the matter of classification has proceeded on a matter of concession of facts we do not allow the appellants to withdraw from that concession. They are now not permitted to arg....
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....issue we hold that extended period of limitation could not have been invoked for making this demand and the demand if any should be limited to the normal period of limitation as prescribed by the Section 11A of the Central Excise Act, 1944. 4.11 As we have concluded that charge of suppression, mis-statement etc., with intent to evade payment of duty cannot be upheld for invoking the extended period of limitation, the penalties imposed upon the Appellant 1 in terms of Section 11AC ibid, to cannot be upheld. In case of Rajasthan Spinning and Weaving Mills Ltd. [2009 (238) ELT 3 (SC)], Hon'ble Supreme Court clarifying its observations made in case of Dharmendra Textiles referred in the impugned order, observed as follows: "11. In a case of non-payment, short-payment or erroneous refund of duty normally three issues are likely to arise relating to (i) recovery, (ii) interest and (iii) penalty. The three issues are dealt with under section 11A (Recovery of duties), section 11AA (Interest for the period from three months after the determination of duty payable till the date of payment of duty), section 11AB (Interest for the period from the first day of the month succeeding t....
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....pecified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice.] (2) The [Central Excise Officer] shall, after considering the representation, if any, made by the person on whom notice is served under subsection (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. Provided that if such person has paid the duty in full together with, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice are served under sub-section (1) shall, without prejudice to the provisions of section 9, 9A and 9AA, be deemed to be conclusive as to the matters stated therein: Provided further that, if such person has paid duty in part, interest and penalty under sub-section (1A), the Central Excise Officers, shall determine the amount of duty or interest not being in excess of the amount partly due from such person.] (2A) Where any notice has been served on a person under sub- section (1), the Central Excise Officer,- (a) in ....
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....cise Officer, but for this sub- section. (2C) The provisions of sub-section (2B) shall not apply to any case where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President.] (3) For the purposes of this section- (i) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (ii) "relevant date" means,- (a) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short- paid- (A) where under the rules made under this Act a periodical return, showing particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed; (B) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (C) in any other case, the date on which the duty is....
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....h means with intent to evade duty. The next set of words "contravention of any of the provisions of this Act or Rules" are again qualified by the immediately following words "with intent to evade payment of duty". It is, therefore, not correct to say that there can be a suppression or mis-statement of fact, which is not wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11A. Mis-statement or suppression of fact must be wilful." (emphasis added) 13. The same position was reiterated in Continental Foundation Jt. Venture vs Commissioner of Central Excise, (2007) 216 ELT 177 to which one of us (Kapadia J.) was a party. In Paragraphs 10 and 12 of the judgment it was observed as follows: "10. The expression "suppression" has been used in the proviso to Section 11A of the Act 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. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known....
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....y of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined: [Provided that where such duty as determined under sub- section (2) of section 11A, and the interest payable thereon under section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the duty so determined: Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso: Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purpose of this section, the duty as reduced or increased, as the case may be, shall be taken into account: ....
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....ion of the penalty provision in section 11AC of the Act. On behalf of the assessees it was also submitted that sections 11A and 11AC not only operate in different fields but the two provisions are also separated by time. The penalty provision of section 11AC would come into play only after an order is passed under section 11A(2) with the finding that the escaped duty was the result of deception by the assessee by adopting a means as indicated in section 11AC. 19. From the aforesaid discussion it is clear that penalty under section 11AC, as the word suggests, is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section. 20. At this stage, we need to examine the recent decision of this Court in Dharamendra Textile (supra). In almost every case relating to penalty, the decision is referred to on behalf of the Revenue as if it laid down that in every case of non-payment or short payment of duty the penalty clause would automatically get attracted and the authority had no discretion in the matter. One of us (Aftab Alam,J.) was a party to the decision in Dharamendra Textile and we se....
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....rence has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. "27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case (supra) was not correctly decided but Chairman, SEBI's case (supra) has analysed the legal position in the correct perspectives. The reference is answered.........". 21. From the above, we fail to see how the decision in Dharamendra Textile can be said to hold that section 11AC would apply to every case of non-payment or short payment of duty regardless of the conditions expressly mentioned in the section for its application. 22. There is another very strong reason for holding that Dharamendra Textile could not have interpreted section 11AC in the manner as suggested because in that case that was not even the stand of the revenue. In paragraph 5 of the decision the court noted the submission made on behalf of the revenue as follows: "5. Mr. Chandrashekharan, Additional Solicitor General submitted that in Rules 96ZQ and 96ZO there is no....
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.... evade payment of duty. 5.1 Appeal No. E/52763/2018 is allowed and matter is remanded back to the original authority for consideration the issues involved for demanding the duty within normal period of limitation as per section 11 A of Central Excise Act, 1944 in light of the observations made in para 4.3 to 4.8 above. 5.2 Appeal No. E/52764/2018 is allowed. [Order pronounced on 25.09.2026] ============= Document 1 As Received ROUTE BUS ON TATA MAGIC 7 C: TừH KEREXISTHAN GAN FERTAMAMAN 9 Give TIFLE Booy CETGe - 87641-15 TATA ACE FBB As Cleared school bus on tata magic TATA ACE HIGH DECK BODY After 5 Garbage Trippel Cirana Aheadlas TATA MOTORS Connecting Aspirations Document 2 ANNEXURE : AZ H-1 DETAILS OF CHAPTER SUBHEADING 8701 1010 OF M/S ARPHAY FABRICATORS PVT LTD PITHAMDUR 2012-11 Description Of Goods Unit Ce Quormay Dusentiry 073 TIDTAL 1796554 2013-14 25 2416915 2015-16 OLS DECEMBER 87041010 TIPPER BODY 5877 TOTAL 25577 Duty payable on goods declared by Notice e No 1 under chapter subheading 87041010 Year Nio of Tipper manufactured Assessable don ic Daily Ed Cesa Ed C....
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....87059000 SALE OF GARBAGE TIPPER U 0 35 $5 3196297 2016 JANUARY 87059000 SALE OF GARBAGE TIPPER U 0 138 133 1525257 . 2016 FEBRUARY 87059000 SALE OF GARBAGE TIPPER U 0 44 44 3800350 2015 MARCH 87059000 SALE OF GARBAGE TIPPER u 0 28 28 2189644 TOTAL 303 25053071 2016-17 2016 April 87059000 SALE OF GARBAGE TIPPER U 0 83 83 7432188 2016 MAY 87059000 SALE OF GARBAGE TIPPER U 0 56 56 4475728 2016 JUNE 87059000 SALE OF GARBAGE TIPPER U 0 13 13 892611 2016 JUNE 87059000 SCRAP U 0 2 2 23809 2016 JULY 87059000 SALE OF GARBAGE TIPPER U 0 15 15 744888 2016 AUGUST 87059000 SALE OF GARBAGE TIPPER U 0 6 6 419005 2016 SEPTEMBER 87059000 SALE OF GARBAGE TIPPER U 0 2 2 158116 2016 OCTOBER 87059000 SALE OF GARBAGE TIPPER U O 61 61 5450229 2016 NOVEMBER 87059000 SALE OF GARBAGE TIPPER U 0 102 102 9978979 2016 DECEMBER 87059000 SALE OF GARBAGE TIPPER U 0 117 117 8861011 2017 JANUARY 87059000 SALE OF GARBAGE TIPPER U 0 A 44 44 2478047 2017 FEBRUARY 87059000 SALE OF GARBAGE TIPPER U 0 97 97 6708453 2017 MARC !! 37050000 SALE OF GANDAGC TIPPER U 0 12 12 222820 TOTAL 610 47845884 Duty payable on goods declared by Noticee No 1 under chapter subheading 87059000 Year Qty M....