2021 (9) TMI 36 - AT - Central Excise

SSI Exemption - use of brand name of others - certain clearances of excisable goods chargeable to NIL rate of duty during the period 01.04.2004 to 29.10.2004 - clearance of non-excisable products in terms of N/N. 08/2003 - extended period of limitation - HELD THAT - The appellants have been availing the exemption notification available for small-scale industries and have been filing intimations as required under Central Excise Rules. We find that they have filed Intimations dated 01.04.2003, 01.04.2004 under Rule 11 (6) and under Rule 173B. They have filed a declaration effective from 01.03.2001 indicating that they will be clearing bread, bun etc. falling under sub-heading 1985.90 of CETA chargeable to NIL rate of duty. There is no ambiguity in the wordings of the Notification. Therefore, there are no reason for the appellants to entertain any doubts regarding the notification. The appellant s submission that they had a bona fide belief that goods attracted NIL rate of duty was same as non-excisable goods. There is no merit in the argument. The appellant is a regular manufacturer and has been availing the very same benefit for quite some time. In such circumstances, it is difficult to accept that the appellants had a bona fide belief. The appellants have not given any declaration to the effect that they manufacture excisable goods which are chargeable to NIL rate of duty and they consider the same to be non-excisable goods. The only declaration given by the appellants that to with effect from 01.03.2001 is to the effect that they are manufacturing bread, bun etc. falling under CETA 1985.90 and chargeable to NIL rate of duty. It is not understood as to how the Department would be in the knowledge that the appellants are manufacturing same goods in 2004 and would treat them as non-excisable goods. Extended period of limitation - HELD THAT - It is not the case of the appellants that their unit has been subjected to audit in between. Under the circumstances, the Department had no way to be in the knowledge of the activities of the appellants. Therefore, it can only be concluded that the appellants have suppressed material facts from the Department. In such circumstances, the extended period is rightly invokable. Appeal dismissed.

Summary

Issues:
Challenge to Order-in-Appeal denying exemption under Notification No. 8/2003 for excisable goods cleared at NIL rate of duty; Invocation of extended period for demand, interest, and penalty.

Analysis:

Issue 1: Challenge to Order-in-Appeal
The appellant challenged Order-in-Appeal No.128/2009 denying exemption under Notification No. 8/2003 for excisable goods cleared at NIL rate of duty. The appellant claimed exemption for certain clearances during 01.04.2004 to 29.10.2004 under the SSI exemption. The Department issued a show cause notice, confirmed by lower authorities, upholding the impugned order.

Analysis: The appellant contended that they believed goods cleared at NIL rate of duty were not includable in turnover, paying duty under protest. They relied on Tribunal decisions in their favor. However, the Department argued that such clearances are includable for aggregate clearances. The Tribunal found the Notification clear, rejecting the appellant's belief that NIL rate goods were non-excisable. The Tribunal held extended period invokable due to suppression of material facts.

Issue 2: Invocation of Extended Period
The appellant argued that the extended period should not be invoked as they had a bona fide belief regarding the interpretation of the notification. They relied on a Tribunal decision supporting their stance. The Department contended that the extended period was justified as the appellant suppressed facts knowingly, citing relevant case law.

Analysis: The Tribunal found that the appellant's belief lacked merit as the Notification's language was unambiguous. Comparing the case to a previous decision, the Tribunal noted the appellant's failure to provide clarifications to the Department. As the appellant had not declared excisable goods cleared at NIL rate of duty as non-excisable, the Department was unaware, justifying the invocation of the extended period.

In conclusion, the Tribunal upheld the denial of exemption and the invocation of the extended period, rejecting the appeal on 31/08/2021. The judgment emphasized the importance of clarity in statutory provisions, highlighting the consequences of failing to disclose material facts to the authorities.