1997 (6) TMI 78 - AT - Central Excise

Summary

Issues:
Challenge to Order-in-Original No. 14/MT/88 dated 2-12-1988 passed by Additional Collector of Central Excise, Baroda under small scale exemption Notification 44/82 for the year 1982-83. Main contention on the question of limitation under Section 11A of the Central Excise Act, 1944 regarding alleged suppression of material facts.

Analysis:

The appellant, engaged in manufacturing various products, had availed small scale exemption under Notification 44/82 for the year 1982-83, subject to the condition that the aggregate value of clearances of all excisable goods did not exceed Rs. 20 lakhs in the preceding financial year. The dispute arose when it was discovered that the appellant had cleared organic surface active agents worth Rs. 2,54,810/- during the previous year, potentially exceeding the exemption limit. The Additional Collector issued a notice proposing duty payment, citing the proviso to Section 11A for alleged suppression of material facts. The appellant contested the notice, denying any suppression or wrongdoing, leading to the present appeal.

The key issue in the appeal pertained to the question of limitation under Section 11A. The appellant argued that there was no suppression of material facts regarding the clearance of surface active agents as the department was already aware of these clearances. Despite the non-disclosure of the exact value in the classification list, the appellant had submitted a declaration on the same day, explicitly stating the value of organic surface active agents cleared during the preceding year. This timely declaration, made alongside the classification list, demonstrated transparency and negated any intention to conceal facts or evade duty. Citing a similar precedent, the Tribunal held that the proviso to Section 11A was not applicable in this case, as the appellant's actions did not indicate any intent to suppress facts.

Given the Tribunal's finding on the limitation issue, it was deemed unnecessary to delve into other aspects raised in the appeal. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.