1983 (4) TMI 166 - AT - Central Excise

Summary

Issues:
1. Whether there was deliberate suppression of facts by the respondent.
2. Whether the demand was barred by limitation under Section 11 A of the Central Excises and Salt Act, 1944.
3. Whether the delay in filing the appeal should be condoned.
4. Whether the respondent was aware of the correct position regarding payment of duty on the sulphuric acid.
5. Whether there was suppression of facts on the part of the respondent.
6. Whether the proviso to Section 11 A applies in this case.

Analysis:

1. The appeal was filed by the Collector of Central Excise, Cochin against the order of the Appellate Collector, who extended the benefit of doubt to the respondent, stating that there was no deliberate suppression of facts by them. The Assistant Collector had found the respondent liable to pay duty on Sulphuric Acid used for pollution control, which was not eligible for exemption. The Tribunal found that there was suppression of facts leading to non-levy of duty, as the respondent did not declare the correct position in the statutory records and returns, even though they were aware of the correct position regarding payment of duty.

2. The Tribunal considered the application of Section 11 A of the Act, which provides a period of limitation for issuing a notice for non-payment of duty. The proviso to Section 11 A extends the period to five years if there is fraud, collusion, wilful misstatement, suppression of facts, or contravention of the Act with intent to evade payment of duty. The Tribunal held that there was suppression of facts in this case, leading to non-levy of duty, and therefore, the demand was not barred by limitation.

3. The appellant sought condonation of a one-day delay in filing the appeal, which was granted by the Tribunal due to the importance of a letter that the appellant had to rely on. The delay was considered minimal, and the appeal was allowed to proceed.

4. The respondent argued that non-disclosure of information does not amount to suppression of facts, claiming it was an unintentional omission. However, the Tribunal found that the respondent was aware of the leviability of duty on the sulphuric acid used for pollution control, as evidenced by their actions in the Cochin Division, where duty was being paid on such acid.

5. The Tribunal concluded that there was indeed suppression of facts on the part of the respondent, as they did not disclose the relevant information in the statutory records required by the department. The respondent's failure to declare the correct position regarding the payment of duty on the sulphuric acid used for pollution control constituted suppression of facts, leading to non-levy of duty.

6. The Tribunal interpreted the proviso to Section 11 A to include wilful misstatement of facts or suppression of facts. Given that the respondent was aware of the leviability of duty on the acid used for pollution control and failed to declare it separately in the returns and lists submitted to the department, the Tribunal found that there was suppression of facts. Therefore, the Tribunal set aside the order of the Appellate Collector and restored the order of the Assistant Collector confirming the demand of duty from the respondent.