1998 (2) TMI 372 - AT - Central Excise

Summary

Issues:
1. Whether the demand of duty of Rs. 94,587/- is barred by limitation?
2. Whether there was wilful suppression of fact by the appellant with intent to evade payment of duty?

Analysis:

Issue 1:
The appeal was against the demand of duty of Rs. 94,587, with the appellant arguing that the entire demand was barred by limitation. The appellant contended that they were availing the benefit of assessment under Rule 173C(ii) by submitting proforma invoices and other documents regularly. The appellant pointed out that the department was aware of the goods being moved from the factory to their depot, as evidenced by the documents submitted. The appellant relied on a previous Tribunal decision to support their argument that their omission to furnish certain information did not amount to wilful suppression of facts. The Tribunal agreed with the appellant, stating that since there was no duty on the appellant to disclose certain information, the longer period of limitation could not be invoked. The appeal was allowed, and the penalty imposed was set aside.

Issue 2:
The Department argued that the appellant had suppressed facts by not disclosing the final sale invoices for goods transferred from the Head Office to the Branch Office at a higher price. The Department contended that this omission amounted to suppression of the correct value for assessment. However, the Tribunal noted that the appellant had been transparent in filing returns and providing necessary documents, including proforma invoices indicating the movement of goods from the factory to the depot. The Tribunal held that since there was no legal obligation for the appellant to disclose the sale price from the depot, there was no wilful suppression of facts with intent to evade payment of duty. The Tribunal cited a Supreme Court decision to support the distinction between deliberate omission and suppression of material fact. Consequently, the Tribunal ruled in favor of the appellant, stating that the longer period of limitation could not be invoked in this case, and the penalty imposed was unsustainable and set aside.