2002 (7) TMI 151 - AT - Central Excise

Summary

Issues involved:
1. Alleged evasion of additional duties of Excise on bleached fabrics.
2. Bona fide belief of the assessee company regarding duty exemption.
3. Intention to evade duty and suppression by the assessee.
4. Filing of RT 12 returns and verification by the department.
5. Plea of limitation in issuing show cause notices for different periods.
6. Availability of Modvat credit for discharge of duties.
7. Burden of proof on the assessee regarding duty payment.

Detailed Analysis:
1. The case involved allegations of evasion of additional duties of Excise on bleached fabrics used for manufacturing interlining cotton fabrics. The assessee claimed benefit of Notification No. 67/95-C.E. but was accused of evading payment of additional duties during a specific period. The Commissioner imposed penalties on the company and its officers based on the alleged evasion.

2. The assessee argued that they believed the duty exemption applied to both basic and additional duties, claiming no intention to evade duty. They cited Modvat credit availability and departmental knowledge of their declarations. However, the Commissioner rejected these arguments, stating that the exemption only covered basic duties and not additional duties, and questioned the timing of their declarations.

3. The Commissioner found the intent to evade duty based on various statements and circumstances, including delayed entries in declarations and claims made under the notification. The Tribunal noted that the department was aware of the claims made by the assessee, indicating no intention to defraud the revenue.

4. The issue of filing RT 12 returns for bleached fabrics was raised, with discrepancies in the department's ability to verify duty payments. The Tribunal found substance in the assessee's claim that there was no intention to evade duty based on the analysis of the returns and previous show cause notices.

5. The plea of limitation in issuing show cause notices for different periods was discussed, with reference to relevant Tribunal judgments. The Tribunal upheld the limitation plea, stating that demands confirmed were hit by limitation, leading to the dismissal of penalties on the company and its officers.

6. The availability of Modvat credit for discharge of duties paid on bleached fabrics was highlighted, with reference to Tribunal judgments supporting revenue neutrality and the applicability of the limitation claim in the present case.

7. The burden of proof on the assessee regarding duty payment was emphasized, with reference to a Supreme Court judgment. The Tribunal found that the burden was not met in this case, leading to the allowance of all appeals and consequential benefits according to law.