2018 (7) TMI 1274 - AT - Central Excise

Area based exemption - N/N. 50/2003-CE dated 10.06.2003 - Self assessment scheme - demand raised by invoking Extended period of limitation - Held that - Under self-assessment scheme, duty is cast on the assessee to properly assess the goods for payment of duties leviable thereon. Admittedly the appellants were filing requisite returns showing the amount of excise duty or additional excise duty and claimed the exemption of the same in terms of the Notification. Non-mention of NCCD in the said returns should have raised the eyebrows of the jurisdictional officers and they should have advised the assessee at that point of time itself that NCCD is required to be paid by them. The fact of non-payment of NCCD was writ clear on the said returns, in which case the observations of the appellate authority that the appellant never approached the Revenue by seeking clarification on payment of NCCD cannot be appreciated. Hon ble Supreme Court in the case of Pushpam Pharmaceuticals Company v. Collector of C.Ex., Bombay 1995 (3) TMI 100 - SUPREME COURT OF INDIA has observed that extended period is not applicable just for any omission of assessee unless it is deliberate to escape from payment of duty. The Hon ble Apex Court further observed that expression suppression of facts in proviso to section 11A(1) is to be interpreted strictly because it has been used in company of such strong words as fraud, collusion or willful default etc., where facts are known to both the parties, the omission by one to do what he might have done and not that he must have done does not render it suppression of facts. Inasmuch as the entire facts were being placed before the Revenue, by way of filing returns and inasmuch as the Revenue was aware of the fact of non-payment of NCCD, it cannot be said that there was any mala fide suppression or mis-statement on the part of the appellant so as to evade payment of duty - the extended period was not available to the Revenue. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Notification No.50/2003-CE regarding exemption of NCCD.
2. Application of longer period of limitation for demand of NCCD.
3. Burden of proof on Revenue for invoking extended period of limitation.
4. Compliance with duty payment obligations under self-assessment scheme.

Analysis:
1. The case involved the interpretation of Notification No.50/2003-CE, which exempted goods from duty of excise or additional duty of excise. The dispute arose regarding the exemption of National Calamity Contingent Duty (NCCD) on the appellant's manufactured goods.

2. The Revenue contended that NCCD was not exempted under the notification, leading to a demand for payment of NCCD for a specific period. The appellant argued that the demand for the period prior to a certain date should be barred by limitation due to their belief in the exemption under the notification.

3. The issue of the longer period of limitation was crucial, with the Revenue invoking it to demand NCCD for a period preceding the usual one-year limit. The appellant challenged this, emphasizing their regular filing of returns and the Revenue's awareness of the situation, which, they argued, precluded the application of the extended limitation period.

4. The Tribunal analyzed the facts and legal precedents, noting that under the self-assessment scheme, the duty to assess goods correctly rested with the assessee. However, the Tribunal found that the appellant had been filing returns indicating excise duty but omitting NCCD, which should have prompted the Revenue to advise them on the correct payment obligations.

5. The Tribunal referred to Supreme Court decisions emphasizing that the extended limitation period requires proof of deliberate withholding of information by the assessee with a mala fide intention to evade duty payment. In this case, as the Revenue was aware of the non-payment of NCCD through the appellant's returns, the Tribunal held that there was no mala fide suppression or misstatement to justify invoking the extended period.

6. Ultimately, the Tribunal ruled in favor of the appellant, setting aside the demand for NCCD beyond the normal one-year period. The decision highlighted the importance of transparency in filings and the Revenue's awareness of relevant facts in determining the applicability of the extended limitation period.

This comprehensive analysis of the judgment provides a detailed understanding of the legal issues and the Tribunal's reasoning in resolving the dispute related to the demand for NCCD and the application of the limitation period.