2011 (4) TMI 128 - SC - Central Excise

Penalty - Limitation - Classifications - Jaljira masala - The classification lists were duly approved by the Department from time to time - All the facts were known to the Department, whose officers had visited the factory of the assessee on at least 12 occasions - In the circumstances, do not find any infirmity in the reasoning given by the Tribunal in coming to the conclusion that there was no wilful suppression on the part of the assessee enabling the Department to invoke the extended period of limitation under the proviso to section 11A(1) of the 1944 Act - Therefore, the appeal has no merit and is dismissed.

Summary

Issues:
- Appeal against CEGAT judgment on extended period of limitation availability to the department.

Analysis:
1. The appellant challenged a CEGAT judgment allowing the respondent's appeal, contending that the extended period of limitation was not available to the department. The respondent, a manufacturer of Jaljira powder, had filed classification declarations claiming duty exemption from 1994 to 1999 under Chapter sub-heading No. 0903.10, which were approved by the department over the years, leading to finality in assessment.

2. A circular later classified Jaljira masala under Chapter 21 as an edible preparation, triggering a show-cause notice citing the extended period of limitation under the proviso to section 11. The respondent argued no wilful suppression, but the Commissioner found suppression and duty evasion. The Tribunal overturned this decision, leading to the current appeal.

3. The Supreme Court referred to the Anand Nishikawa case, emphasizing that when the classification lists were regularly approved by the department, it did not constitute "suppression of facts." The Court highlighted the need for deliberate and wilful omission to evade duty, as seen in the Pushpam Pharmaceutical case. Additionally, in the O.K. Play case, it was noted that if all facts were known to the department and classifications were approved over time, there was no wilful suppression to invoke the extended limitation period.

4. Comparing the present case to past judgments, the Court found no infirmity in the Tribunal's reasoning. It concluded that there was no wilful suppression by the respondent, enabling the department to invoke the extended limitation period under the proviso to section 11A of the Central Excise Act, 1944. Consequently, the appeal was dismissed for lacking merit.