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2019 (12) TMI 330 - AT - Central ExciseExtended period of limitation - Valuation - processed fabrics - mis-declaration of the value of the grey fabrics supplied to them on job-work by their principal manufacturer on the basis of the declaration issued by that manufacturer - filing of the classification list under rule 173B of the erstwhile Central Excise Rules, 1944 - HELD THAT - In appellant own matter, for identical dispute pertaining to a different period, the Tribunal had extended the benefit of limitation in VISHNU DYEING PRINTING WORKS VERSUS COMMISSIONER OF C. EX., MUMBAI 2007 (9) TMI 157 - CESTAT, MUMBAI which was upheld by the Hon ble High Court in COMMISSIONER VERSUS VISHNU DYEING PRINTING WORKS 2008 (8) TMI 896 - BOMBAY HIGH COURT where it was held that invocation of extended period for the confirmation of demand against the present appellant is not available to the revenue in the absence of any evidence to show that the appellant had colluded with the merchants/traders in giving wrong declaration of the price. The appeal is allowed on the claim of limitation.
Issues:
Confirmation of demand for mis-declared value of processed fabrics, Invocation of extended period for demand confirmation, Benefit of limitation based on bona fide belief, Collusion with merchants/traders for misdeclaration of price, Reduction of penalties imposed, Rejection of revenue's appeals. Confirmation of Demand for Mis-declared Value of Processed Fabrics: The appeal pertained to the confirmation of demand amounting to ?6,79,169 on processed fabrics cleared by M/s Vishnu Dyeing & Printing Works, for allegedly mis-declaring the value of grey fabrics supplied to them on job-work by their principal manufacturer. The issue revolved around the duty liability imposed on them for the extended period based on the declaration issued by the manufacturer. The appellant argued that they had no control over the details furnished by the merchant manufacturer for filing classification lists and price lists, thus challenging the sustainability of the duty liability. Invocation of Extended Period for Demand Confirmation: The Authorized Representative for the respondent contended that the issue was covered by a decision of the Larger Bench in a previous case. The decision emphasized the importance of examining the value of grey fabric to determine the correct valuation of processed fabric, highlighting that a job worker cannot evade duty liability based on incorrect valuation. The Tribunal had previously extended the benefit of limitation in a similar dispute for the appellant, where the Tribunal's decision was upheld by the High Court. Benefit of Limitation Based on Bona Fide Belief: The Tribunal found that the appellant's case was similar to previous decisions, supporting the argument that the extended period cannot be invoked in cases where there is a bona fide belief. The appellant's reliance on a Supreme Court case reinforced the claim that they had reason to believe the price was correct, as it was based on declarations provided by merchants/traders. The Tribunal ruled in favor of the appellant, stating that the revenue could not invoke the extended period without evidence of collusion with merchants/traders for misdeclaration of price. Collusion with Merchants/Traders for Misdeclaration of Price: The Tribunal noted that the revenue failed to provide any evidence of collusion between the appellant and other parties for misdeclaration of price. Additionally, there was a lack of material to prove that the merchants/traders had not declared the correct purchase price. Consequently, the Tribunal rejected the revenue's appeals and upheld the reduction of penalties imposed on other noticees. Reduction of Penalties Imposed and Rejection of Revenue's Appeals: Based on the findings related to limitation, lack of evidence of collusion, and absence of proof regarding incorrect purchase price declaration by merchants/traders, the Tribunal allowed the appeal on the claim of limitation. Subsequently, all other consequences, including interest and penalty, were set aside. The revenue's appeals were rejected, affirming the decision to reduce penalties imposed and dismissing the revenue's contentions. This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT MUMBAI, providing a comprehensive overview of the legal reasoning and conclusions reached in the case.
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