2015 (9) TMI 522 - HC - Central Excise

Extended period of limitation - wilful suppression of fact or commission of any fraud - suppression of production of goods and clandestine removal - Held that - firstly the assessee had not produced invoices etc. despite being demanded by the Central Excise Officers vide letters dated 10.1.1990, 23.1.1990, 5.3.1990, 27.3.1990, 24.4.1990 and 14.5.1990 and when the Central Excise Officers visited the manufacturing unit on 17.5.1990 then the appellant took the stand that the records have burnt in a fire accident on 20.4.1990. The inquiry made by the Central Excise Officers revealed that neither fire brigade was called in the alleged incident of fire accident nor any furniture in the premises get damaged. It is also relevant to note that although the appellants were knowing well that the Central Excise Officers are repeatedly asking certain documents to be produced yet they had not given any intimation with regard to the alleged fire accident to the concerned Central Excise Officers about the alleged fire accident except stating that the intimation was sent by letter under Certificate of Posting. The concurrent findings of fact recorded by the fact finding authorities, as briefly noted above, clearly attracted the proviso to Section 11- A(1) of the Act. Removal of goods in the name of dummy unit and unestablished purchases from one M/s. Ajay Traders for trading purposes were clearly the result of suppression of facts and fraud by the appellants and, therefore, the Adjudicating Authority has not committed any error of law to invoke the extended period of limitation under the proviso to Section 11-A(1) of the Act. - Decided against the assessee.

Issues Involved:
1. Invocation of the extended period of limitation under the proviso to Section 11-A of the Central Excise Act, 1944.
2. Violation of natural justice due to non-supply of documents.
3. Burden of proof regarding suppression of facts and clandestine manufacture.
4. Delay in the delivery of the Tribunal's order.

Issue-wise Detailed Analysis:

1. Invocation of the Extended Period of Limitation:
The appellant argued that the Tribunal did not record any finding on the invocation of the extended period of limitation under the proviso to Section 11-A of the Central Excise Act, 1944. The Tribunal and Adjudicating Authority found that the appellants did not produce invoices despite repeated requests and claimed that records were destroyed in a fire accident. The Adjudicating Authority and Tribunal noted discrepancies in the appellants' claims, such as the non-calling of the fire brigade and no damage to furniture, indicating suppression of material facts. The Tribunal upheld the Adjudicating Authority's decision to invoke the extended period due to suppression of facts and fraud by the appellants.

2. Violation of Natural Justice:
The appellant contended that the adjudication order was passed without supplying copies of relied upon or non-relied upon documents, thus violating natural justice. However, the Tribunal and Adjudicating Authority found that the appellants were given several opportunities to produce records and respond to the allegations but failed to do so. The Tribunal determined that there was no breach of natural justice principles as the appellants were afforded multiple opportunities to be heard.

3. Burden of Proof Regarding Suppression of Facts and Clandestine Manufacture:
The appellant argued that the burden to prove suppression of facts and clandestine manufacture was on the Department, which it failed to discharge. The Tribunal and Adjudicating Authority found that the appellants could not establish the purchase of carbon papers from M/s. Ajay Traders and noted that M/s. Rohit Enterprises was a dummy unit. The Tribunal observed that the balance sheet figures could not be disregarded and that the appellants failed to prove their claims. The concurrent findings of fact by the authorities indicated suppression of facts and fraud, justifying the extended period of limitation.

4. Delay in the Delivery of the Tribunal's Order:
The appellant claimed that the Tribunal's order was invalid as it was delivered 11 months after the hearing, citing the Supreme Court's decision in Anil Rai Vs. State of Bihar. The Tribunal acknowledged the delay but found that the order did not suffer from any error of law or facts. The Tribunal concluded that the delay did not affect the merits of the case and dismissed the appeal.

Conclusion:
The High Court dismissed the appeal, finding no merit in the appellant's arguments. The Tribunal's findings were upheld, including the invocation of the extended period of limitation due to suppression of facts and fraud, the absence of a breach of natural justice, and the validity of the Tribunal's order despite the delay in its delivery. The appeal was dismissed, and the questions of law were answered accordingly.

← Previous Next →