2015 (7) TMI 383 - HC - Central Excise

Invocation of extended period of limitation - Suppression of facts - Held that - There has been failure on the part of the appellant to discharge the duty liability on clearance in excess of the exempted production. The adjudicating authority, the Commissioner (Appeals) as well as the Tribunal concurrently have come to the clear conclusion that it is a case of suppression and, therefore, this Court finds no reason to differ with the well considered finding of fact recorded by the authorities below, in the absence of any material to the contrary. The fact of suppression has been reiterated by all the authorities in their order and the Tribunal has also taken note of the same in coming to its well considered finding. - subsequent information by the assessee to the respondent/Department cannot justify a plea of no suppression. The act of suppression had already happened at the time of clearance of the exempted goods in excess of the exemption limit and, therefore, it is not open to the assessee to plead a case of no suppression. - Decided against assessee.

Summary

Issues:
1. Whether the extended period of limitation was rightly invoked in the case?
2. Whether there was suppression of facts by the appellant regarding the duty liability?
3. Whether the demand of duty, interest, and penalty was legally justified?

Analysis:

Issue 1: Extended period of limitation
The appellant voluntarily disclosed their affairs after two and a half years of crossing the small scale exemption limit. The Tribunal confirmed the demand within the statutory limit of five years, although there was a delay in issuing the show cause notice. The Tribunal held that suppression regarding production in excess of the exemption limit justified the extended period. The demand within the prescribed time was considered legal and proper, leading to the dismissal of the appeal.

Issue 2: Suppression of facts
The appellant, a manufacturer of various goods, failed to pay duty upon crossing the small scale exemption limit. The authorities found that the appellant knowingly remained silent about the duty liability until the department's visit, establishing suppression. The failure to declare the excess production and non-payment of duty were deemed as suppression, justifying the demand of duty, interest, and penalty. The authorities concluded that the appellant's subsequent disclosure did not absolve them of suppression.

Issue 3: Justification of duty demand
The adjudicating authority, Commissioner (Appeals), and Tribunal concurred that there was suppression and upheld the duty demand, interest, and penalty. The Tribunal emphasized that belated information by the appellant could not negate the suppression that occurred during the relevant period. The High Court upheld the findings of the lower authorities, stating that the appellant's plea of no suppression was unfounded. Consequently, the appeal was dismissed, affirming the legality of the duty demand, interest, and penalty.

In conclusion, the High Court upheld the decision of the Tribunal, confirming the demand of duty, interest, and penalty due to the established suppression of facts by the appellant. The extended period of limitation was considered justified, and the plea of no suppression was rejected. The judgment emphasized the importance of timely compliance and transparency in tax matters to avoid legal consequences.