1993 (3) TMI 98 - HC - Central Excise

Summary

Issues Involved:
1. Applicability of the proviso to Section 11A of the Central Excises and Salt Act, 1944.
2. Alleged mis-statement or suppression of facts by the petitioner.
3. Validity of the show cause notice dated January 4, 1993.

Detailed Analysis:

1. Applicability of the Proviso to Section 11A of the Central Excises and Salt Act, 1944:
The primary issue is whether the proviso to Section 11A is applicable, which extends the period for issuing a show cause notice from six months to five years in cases involving fraud, collusion, wilful mis-statement, or suppression of facts. The court noted that the proviso applies only if there is evidence of such misconduct. The relevant portion of Section 11A states:
"Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if for the words 'Central Excise Officer', the words 'Collector of Central Excise', and for the words 'six months', the words 'five years' were substituted."

2. Alleged Mis-statement or Suppression of Facts by the Petitioner:
The petitioner manufactures and sells windscreens of laminated sheet glass, classified under sub-heading No. 7004.20 of Chapter 70 Section XIII of the Central Excise Tariff Act, 1985. The petitioner contends that the thickness described as 6 mm and 8 mm should be treated as 6.38 mm and 8.38 mm respectively, as per the Bureau of Indian Standards and Indian Standard Specifications for laminated safety glass. The petitioner has been paying excise duty based on nominal thickness, which was known and accepted by the excise department. The court observed that the respondents knew that the petitioner was describing the thickness on a nominal basis and not on an actual basis. The respondents later became aware of the technical manufacturing process through literature and IS 2553 (Part II) 1992, which clarified that the thickness of laminated safety glass includes the thickness of the sheet glass and the interlayer.

3. Validity of the Show Cause Notice Dated January 4, 1993:
The court examined whether the petitioner had committed any fraud, collusion, wilful mis-statement, or suppression of facts. It was found that the petitioner had disclosed all relevant information, including the nominal thickness and the manufacturing process. The court noted that the technical know-how was not exclusively within the petitioner's domain and was available to the respondents through various sources. The court concluded that the petitioner had not made any wilful mis-statement or suppressed any facts. Therefore, the extended period of five years under the proviso to Section 11A was not applicable. The court relied on precedents such as Jaishri Engineering Co. (P) Ltd. v. Collector and M/s. Padmini Products v. Collector of Central Excise, Bangalore, which emphasized that mere failure or negligence does not attract the extended period under Section 11A.

Conclusion:
The court found that the show cause notice dated January 4, 1993, was unsustainable as there was no evidence of fraud, collusion, wilful mis-statement, or suppression of facts by the petitioner. The writ petition was allowed, and the show cause notice was quashed. Costs were awarded to the parties.

Judgment:
The writ petition is accordingly allowed. Costs on parties.