1995 (11) TMI 147 - AT - Central Excise

Summary

Issues:
- Whether the demand for duty is barred by limitation?
- Whether the appellant intentionally evaded payment of duty with mala fide intentions?

Analysis:

Issue 1: Whether the demand for duty is barred by limitation?

The appeal challenged the duty demand of Rs. 5,38,282/- and a penalty of Rs. 1,10,000/- imposed by the Collector of Central Excise, Madras. The appellant contended that the demand was time-barred as the longer period of limitation under Section 11A of the Central Excises and Salt Act, 1944 was invoked. The appellant argued that they had disclosed relevant information, including the use of the brand name 'Millar,' to the Department as early as 1984. They maintained that there was no intent to evade duty, citing previous communications and classification filings as evidence of their transparency. The Department, however, claimed that the appellants did not disclose the affixture of the brand name post the relevant notification and annual declarations from 1987 onwards did not reveal the brand name usage.

Issue 2: Whether the appellant intentionally evaded payment of duty with mala fide intentions?

After considering the submissions and evidence, the Tribunal found that the appellants had not acted with mala fides to evade duty payment. The Tribunal noted that the appellant had disclosed relevant information, including brand name usage and royalty payments, to the Department since 1984. The Tribunal emphasized the Supreme Court rulings, particularly the need for deliberate evasion of duty with intent as highlighted in the case of Tamilnadu Housing Board. The Tribunal held that the intentional evasion of duty could not be attributed to the appellants in this case. The Tribunal stressed that the burden of proof lay with the Department to establish fraud or collusion, which was not evident in this situation. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellant based on the grounds of limitation.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the demand for duty was time-barred and that there was no evidence of intentional evasion of duty with mala fide intentions. The judgment emphasized the importance of transparency and deliberate intent in cases of duty evasion, as outlined in relevant legal precedents.