2014 (12) TMI 1089 - AT - Central Excise

Search and seizure of factory - Failure to submit details of clearances of earlier period - Invocation of extended period of limitation - Suppression of facts - Misdeclaration - Held that - Even though the Appellant had informed about the applicability of excise duty the activity carried out by them, on 25th July, 1997 and promised to furnish details of clearance value for the earlier period, but the same was not submitted. The relevant data could be retrieved only after search and seizure consequent to the visit of their factory on 23.10.97 by the Anti Evasion Unit of the Kolkata I Commissionerate. Thus, it reveals that there was an element of suppression with intent to evade payment of duty for the relevant period in not furnishing the data and also non-payment of appropriate duty for earlier period. In these circumstances, I do not see any justification to interfere with the observations of the ld. Commissioner (Appeals) on the issue of imposition of penalty and confirming the demand invoking extended period of limitation. The contention of the Appellant is that the demand is highly inflated as their sale price was considered as assessable value and not cum-duty price, is also found to be incorrect in as much as in the show-cause notice itself, the sale price was treated as cum-duty price and the assessable value was determined accordingly. The next argument of the ld. Advocate is that in any case, if the demand is confirmed, they would be entitled to modvat credit. The said plea also would not hold good, at this stage, as such plea has been neither raised before the lower authorities nor in their grounds of appeals. Besides, after a period of two decades, it would be difficult and impractical to ascertain from the records about the eligibility of modvat credit. Also, I find that the ld. Advocate has simply advanced the said plea without supporting the same with any evidences. In the result, this contention also merits rejection when examined from all angles. - Decided against assessee.

Summary

Issues:
1. Extended period of limitation for confirming duty for the period 1994-95 to 1996-1997.
2. Imposition of penalty under Section 11AC of the Central Excise Act, 1944 and interest under Section 11AB.
3. Consideration of cum-duty price in computing the demand.
4. Eligibility for modvat credit on confirmed duty.

Extended period of limitation:
The appeal involved a dispute regarding the extended period of limitation for confirming duty for the period 1994-95 to 1996-1997. The Appellant argued that the demand notice issued beyond six months from their voluntary disclosure was barred by limitation. However, the Tribunal held that the demand issued in 1999 was within the limitation period based on precedents like Mehta & Company and Neminath Fabrics Pvt. Ltd. The Tribunal rejected the argument that the demand was time-barred.

Imposition of penalty and interest:
The Appellant contended that there was no intention to evade duty, therefore penalty and interest should not be imposed. The Tribunal disagreed, noting that the Appellant failed to furnish clearance details despite promising to do so, leading to a suppression of facts. The Tribunal upheld the imposition of penalty and interest based on the evidence of intent to evade payment of duty.

Consideration of cum-duty price:
The Appellant claimed that their sale price was not considered as cum-duty price, resulting in an inflated demand. However, the Tribunal found that the assessable value was determined as cum-duty price in the show-cause notice itself. The Tribunal rejected this argument as the sale price was correctly treated, and no evidence was provided to support the claim of an inflated demand.

Eligibility for modvat credit:
The Appellant argued they would be entitled to modvat credit if the demand was confirmed. However, the Tribunal noted that this plea was not raised earlier and lacked supporting evidence. Considering the impracticality of verifying eligibility after two decades, the Tribunal rejected the plea for modvat credit. The Tribunal upheld the Commissioner's decision, concluding that the order was justified based on the evidence and arguments presented.

This detailed analysis covers the key issues raised in the legal judgment, providing a comprehensive overview of the Tribunal's decision on each matter.