2019 (8) TMI 1709 - AT - Central Excise

Extended period of limitation - SCN was issued for the period 2002-03 to 2006-07 on 15.03.2007 - the SCN was time-barred or not - suppression of facts or not - clearances in bulk instead of clearances on retail pack - HELD THAT - Even though there is unambiguous Chapter Note in Chapter 24 the appellant have intentionally devised a method whereby first they have cleared bulk snuff of tobacco captively and issued invoices and paid the duty thereon thereafter the same goods were re-packed for retail pack in their own factory and issued commercial invoices on higher value thereby they suppressed the value of the finished goods cleared from the factory. In their ER-1 return they have not declared the correct clearance value of retail pack whereas they have declared in the ER-1 return only the bulk snuff of tobacco and its value to mislead the department that they have declared the goods in bulk form only. With this modus operandi the department could not know about their activity of payment of duty on the bulk and removal of goods in the retail form therefore there is a clear suppression of fact and mis-declaration on the part of the appellant. The extended period was rightly invoked in the facts of the present case - the impugned order is upheld on merit as well as limitation - Appeal dismissed.

Summary

Issues:
1. Central excise duty evasion through unaccounted manufacture of illicit clearances of snuff of tobacco.
2. Time-barred show cause notice for demand of central excise duty.
3. Suppression of facts and misdeclaration by the appellant.
4. Applicability of duty on clearances of goods in retail pack.
5. Invocation of extended period for demand of duty.

Analysis:
1. The appellant was found to have evaded central excise duty by declaring less assessable value for snuff of tobacco in retail packages, resulting in evasion of duty amounting to ?5,27,486. The appellant voluntarily paid ?1 lac towards the duty evaded before the issuance of the show cause notice. The adjudicating authority confirmed the demand of duty, interest, and imposed penalties, which were partially set aside in the appeal process.

2. The appellant argued that the show cause notice issued for the period 2002-03 to 2006-07 was time-barred, citing their bonafide belief regarding duty payment on bulk snuff of tobacco. They contended that the extended period cannot be invoked due to the absence of suppression of facts in their ER-1 returns. The appellant relied on various judgments to support their argument against the time-barred notice.

3. The Revenue contended that the appellant intentionally devised a modus operandi to evade excise duty by suppressing the clearances of retail packs and misdeclaring the value of goods in their ER-1 returns. They argued that the appellant's actions clearly indicated an intention to evade excise duty through misrepresentation.

4. The Tribunal noted that the duty was payable on the value of retail packs as per the relevant Chapter Note and concluded that the appellant intentionally suppressed the value of finished goods cleared in retail packs. The appellant's misdeclaration in their ER-1 returns misled the department regarding the actual clearances, indicating a clear suppression of facts.

5. The Tribunal dismissed the appellant's appeal, upholding the demand of duty on merit and the invocation of the extended period for demand of duty. They differentiated the present case from the judgments cited by the appellant, emphasizing the intentional misdeclaration and suppression of facts by the appellant to evade excise duty. The Tribunal upheld the impugned order on both merit and limitation, ultimately dismissing the appeal.