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2021 (6) TMI 1034 - AT - Central ExciseSSI Exemption - benefit of N/N. 8/2003-CE dated 1.3.2003 - power driven submersible pumps and motors thereof falling under Chapter Heading 8413 and 8501 of the Central Excise Tariff - appellant did not have the BIS certification - Suppression of facts - extended period of limitation - HELD THAT - It is undisputed that the appellant manufactured products which were not eligible for exemption Notification No. 8/2003-CE dated 1.3.2003, as amended, unless their products met the BIS standards. For the relevant period, the appellant had no certification from BIS and no such certificate has been produced till date. It has also not been established that an application for certification was pending before the BIS authorities and it has been issued subsequently. Therefore, it is not possible to agree with the contention of the learned Chartered Accountant for the appellant that the appellant was eligible for the benefit of exemption notification even though it had no BIS certificate, because the certificate was issued much later in 2014 which means that their products met the standards of BIS all through. Extended period of limitation - HELD THAT - In this case, the demand was raised after the normal period of limitation. In order to invoke the extended period of limitation either fraud or collusion or wilful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty must be established - The fact that the goods were not certified by BIS was in the exclusive knowledge of the appellant and they have not disclosed it to the Revenue. This shows that the appellant had an intention to evade payment of duty. It also establishes that the appellant has suppressed the information from the Department. It is only an audit and verification of records which got these facts to light. It has been recorded by the Commissioner (Appeals) in the impugned order the transactions were recorded in the books of account of the assessee and all goods were cleared under an invoice. This also establishes that the appellant had no intention to evade payment of duty - the intent to evade payment of duty is missing and has not been established by the Revenue. Appeal allowed - decided in favor of appellant.
Issues:
- Appellant's eligibility for exemption under Notification No. 8/2003-CE - Applicability of extended period of limitation for demand - Allegation of intention to evade payment of duty Analysis: Issue 1: Appellant's eligibility for exemption under Notification No. 8/2003-CE The appellant manufactured products falling under Chapter Heading 8413 and 8501 of the Central Excise Tariff and availed exemption under Notification No. 8/2003-CE. However, the exemption was subject to goods conforming to BIS standards, which the appellant lacked during the disputed period. The absence of BIS certification for the relevant period was a crucial factor in determining the appellant's eligibility for the exemption. The appellant's argument of subsequent certification was not deemed sufficient as it did not apply during the disputed period. The absence of certification during the relevant period led to the conclusion that the appellant was not entitled to the exemption notification. Issue 2: Applicability of extended period of limitation for demand The Department raised a demand beyond the normal limitation period, invoking the extended period due to alleged suppression of facts by the appellant. The Department contended that the appellant failed to disclose crucial information regarding BIS certification, indicating an intent to evade duty payment. However, the appellant argued that the demand was time-barred as there was no evidence of fraud or suppression of facts. The appellant's assertion that the demand was based on their own records and not due to any intentional evasion supported the argument against invoking the extended period of limitation. Issue 3: Allegation of intention to evade payment of duty The Department claimed that the appellant's non-disclosure of BIS certification status and availing the exemption without eligibility demonstrated an intention to evade duty payment. The Department highlighted the appellant's failure to disclose this information until audit, indicating suppression of facts. However, the appellant countered this by presenting the inverted duty structure scenario, where paying duty would have resulted in Cenvat credit exceeding the duty liability. This argument, supported by the recording of transactions and invoicing, suggested the appellant's lack of intention to evade duty payment. The absence of intent to evade payment of duty was a key factor in setting aside the impugned order. In conclusion, the Tribunal allowed the appeal, setting aside the impugned order dated 31.01.2008, based on the lack of established intention to evade payment of duty and the appellant's eligibility for Cenvat credit exceeding the duty liability. The judgment emphasized the importance of factual circumstances and intent in determining liability for duty payment and exemption eligibility.
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