2016 (1) TMI 265 - AT - Central Excise

Extended period of limitation - allegation that respondent had undervalued the goods manufactured for STPL on job work basis. - facts were known to the department - whether the Commissioner was right in holding that the demand is barred by limitation - Held that - Price so declared was highly undervalued and that therefore extended period is invokable. On perusal of the Order-in-Original, it is seen that though the respondent assessee had raised the plea of limitation, the adjudicating authority has failed to consider the same, There is no discussion as to whether there was suppression on the part of assessee. In the impugned order, the Commissioner has taken note of the fact that the price declared by the assessee was not objected by the Department. It is seen that the respondent submitted price list in form 2C along with covering letter dated 3.4.2001 to the jurisdictional Superintendent informing that the respondent will be receiving Zinc Die Cast scrap from STPL, respondent intends to take credit of duty on it, manufacture the Zinc Oxide and clear the same to M/s.Videocon Narmada Glass (A division of Videocon International Ltd.) under brand name STPL and will be paying duty on value declared by STPL @ 67/- per kg. The respondent then also filed declaration dated 4.4.2001 under 173B of Central Excise Rules, 1944 declaring intention to manufacture branded goods for STPL and to pay full duty without availing exemption under Notification No.9/2001-CE, On entering into further contracts with STPL the Respondent has vide letters dated 24.5.2001 and 1.8.2001 informed the department of the manufacture of goods for STPL on job work basis and declared the price. Respondent has informed the department about the payment of duty on the basis of price declared by STPL. On such score, the show cause notice dated 21.10.2005 is time barred, When all facts are within the knowledge of the department, they ought to have immediately informed the assessee if there was any shortcoming in the declaration of price or valuation of goods. We therefore are of the considered view that the impugned order calls for no interference. The same is sustained. - Decided against Revenue.

Summary

Issues:
- Challenge to impugned order confirming duty demand, interest, and penalty as time-barred.
- Undervaluation of goods manufactured on job work basis.
- Application of extended period for demand confirmation.
- Commissioner's decision on limitation period.
- Suppression of facts or wilful misstatement by the respondent.
- Interpretation of self-assessment scheme responsibility.
- Consideration of price declaration and valuation of goods.
- Awareness of department regarding manufacturing for another entity on job work basis.
- Time-barred show cause notice.

Analysis:
1. The appeal challenged an impugned order confirming duty demand, interest, and penalty as time-barred. The issue revolved around the undervaluation of goods manufactured on a job work basis. The Commissioner's decision on the limitation period was contested, with arguments focusing on the responsibility under the self-assessment scheme and the application of the extended period for demand confirmation.

2. The Revenue contended that the respondent had undervalued goods with the intention to evade duty payment. The show cause notice invoked the extended period, alleging that the respondent did not include all expenses, suppressed the assessable value, and did not provide a cost sheet. The Revenue argued against the Commissioner's decision, citing a previous judgment and claiming that the price declared was untrue.

3. In response, the respondent's counsel reiterated the Commissioner's findings, emphasizing the absence of suppression of facts or wilful misstatement. The counsel argued that the decision in a specific case applied to the respondent's situation and was correctly applied by the Commissioner. The Apex Court's decision was highlighted to support the respondent's position.

4. The Tribunal considered whether the demand was time-barred and scrutinized the records. It was noted that the responsibility for correct declaration rested with the assessee under the self-assessment scheme. The Tribunal found that the respondent had informed the department about the price declared for goods manufactured on a job work basis. The Commissioner's observation that the department was aware of the manufacturing arrangement and pricing was crucial in determining that the show cause notice was time-barred.

5. Ultimately, the Tribunal upheld the impugned order, stating that the Commissioner's decision was valid and required no interference. The Tribunal agreed with the Commissioner's assessment that the show cause notice was time-barred due to the department's awareness of all relevant facts. As a result, the appeal was dismissed, and the impugned order was sustained.