1986 (4) TMI 252 - AT - Central Excise

Summary

Issues Involved:
1. Validity of the extended period of limitation under Section 11A of the Central Excises and Salt Act, 1944.
2. Allegations of suppression of facts, mis-statement, or mis-declaration with intent to evade payment of duty.
3. Approval and accuracy of price lists and classification lists.
4. Department's responsibility in assessing RT-12 returns and price lists.

Detailed Analysis:

1. Validity of the Extended Period of Limitation under Section 11A of the Central Excises and Salt Act, 1944:
The primary issue was whether the demand for duty beyond the standard six-month limitation period was valid under Section 11A of the Central Excises and Salt Act, 1944. The Collector (Appeals) ruled that the extended period was not sustainable because there were no allegations of suppression of facts, mis-statement, or mis-declaration with intent to evade payment of duty. The Tribunal upheld this view, emphasizing that the show cause notice did not allege fraud, collusion, wilful mis-statement, or suppression of facts with intent to evade duty. The Tribunal referenced the case of Jay Engineering Works Limited, which established that for invoking the five-year limitation, it was necessary to allege and prove such ingredients.

2. Allegations of Suppression of Facts, Mis-Statement, or Mis-Declaration with Intent to Evade Payment of Duty:
The Department argued that the respondents had suppressed facts and mis-declared information by not disclosing the realization of excise duty in excess of what was paid to the Department. However, the Tribunal found that the show cause notice did not contain any allegations of fraud, collusion, or wilful mis-statement with intent to evade duty. The Tribunal noted that merely because the facts were not fully revealed, it could not be automatically inferred that there was an intent to evade duty. The Tribunal concluded that the Department did not make a case for suppression of facts with intent to evade payment of duty.

3. Approval and Accuracy of Price Lists and Classification Lists:
The respondents had filed price lists and classification lists, which were approved by the proper officer. The price lists showed the ex-duty price without indicating the duty abated from the wholesale price. The Tribunal found that the price lists were not properly filled out, and the Departmental officers had approved them without noting discrepancies. The respondents argued that they had filed RT-12 returns regularly, which contained all necessary details and could be verified by the Department. The Tribunal agreed that the approval of price lists by the Department without proper scrutiny did not constitute suppression of facts by the respondents.

4. Department's Responsibility in Assessing RT-12 Returns and Price Lists:
The Tribunal noted that the Department had not acted with due diligence in assessing the RT-12 returns and price lists. The show cause notices indicated that the Department had allowed RT-12 returns to pile up and were assessed after the six-month period had expired. The Tribunal emphasized that the Department's failure to act promptly and vigilantly did not justify extending the limitation period. Member S. Duggal added that the Department's laches and the regular filing of RT-12 returns by the respondents did not support an allegation of deliberate suppression or wilful mis-statement with intent to evade duty.

Conclusion:
The Tribunal upheld the Collector (Appeals)'s decision that the extended period of limitation was not applicable due to the absence of allegations and proof of fraud, collusion, wilful mis-statement, or suppression of facts with intent to evade duty. The appeals were rejected, and the show cause notices were deemed time-barred.