2018 (1) TMI 352 - AT - Central Excise

Extended period of limitation - suppression of facts - N/N. 6/2006-CE dated 01.03.2006 - Exempt goods - Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - Requirement of certificate from Delhi Metro regarding procurement of goods - Held that - the pre-condition of exemption N/N. 6/2006-CE is that the assessee was required to produce a certificate from the competent authority as mentioned therein of the Delhi Metro to the effect that the goods are procured by or on behalf of the Delhi Metro for use in the Delhi Metro Project - There is no dispute that the appellant submitted the certificate for the purpose of availing the exemption notification. It is settled position of the law that mere omission to disclose would not amount to suppression of facts, unless there was deliberate attempt to evade payment of duty - there is no material on record that there is a suppression of fact, with intent to evade the adjudged amount as demanded. It is revealed from the record that the Department was aware regarding the availament of the benefit of exemption notification. The demand of the amount with interest for the normal period of limitation is upheld - penalty set aside - appeal allowed in part.

Summary

Issues:
- Contesting demand on limitation
- Disclosure of facts in the return
- Requirement of certificate for exemption
- Disclosure in ER-1 return
- Suppression of facts and intent to evade payment
- Invocation of extended period of limitation
- Imposition of penalty

Analysis:

The case involved a dispute regarding the demand on limitation. The appellant, engaged in the manufacture of Plastic Power Cables, cleared goods without payment of duty to certain entities under an exemption notification. The appellant submitted certificates as required under the exemption notification for clearance of goods at a 'NIL' rate of duty. The Revenue issued Show Cause Notices demanding payment based on Rule 6(3)(i) of the Cenvat Credit Rules, 2004. The main contention was whether there was suppression of facts to evade payment.

The appellant argued that there was no suppression of facts as they disclosed all information in their return, which was audited by Central Excise officers. The Revenue, however, claimed that the appellant did not disclose non-payment under Rule 6(3) in the return, leading to a lack of awareness on the Department's part.

The Tribunal noted that the appellant had submitted the required certificate for availing the exemption but had not disclosed the non-maintenance of separate records under Rule 6(3) in the ER-1 return. The Tribunal emphasized that mere omission to disclose does not constitute suppression unless there was a deliberate attempt to evade payment. Citing legal precedents, the Tribunal held that the extended period of limitation could not be invoked as the Department was aware of the exemption benefit and had audited the records.

Ultimately, the Tribunal modified the impugned order, upholding the demand for the normal period of limitation but setting aside the demand for the extended period and the penalty. The Tribunal concluded that there was no suppression of facts with intent to evade payment, thereby rejecting the imposition of penalty.

In conclusion, the appeal was disposed of with the decision pronounced on 27.11.2017.