Whether writing a letter to the Central Excise Department well in advance is sufficient to prove that no show cause notice would be issued beyond one year.

In an interested case, decided by the honorable Supreme Court and appellant and contended that:

"The demand has been confirmed from 1st March, 1994 to 5th September, 1997 whereas the show cause notice was issued on 18th February, 1998, well beyond the period of limitation ……. …….. a letter dated 8th March, 1994 written by the appellant to the Assistant Collector of Central Excise, Calcutta disclosing the activity undertaken by the appellant and requesting the Revenue to let the appellant know about the Central Excise formalities required to be observed.  That the writing of the letter well in advance shows the bona fides of the appellant and that there was no suppression, misstatement, etc., on the part of the appellant with an intent to evade payment of duty and the authorities below erred in holding to the contrary".

On the other side, correspondence between the parties' shows that, they could were avoiding Central Excise liability by printing 'thinner' instead of 'solvent' on the packs of bottles.

After discussing the facts and circumstances, while confirming the demand and rejecting the contention of the appellant, honorable Supreme Court has held that,

"It clearly shows that the appellant although was conscious of the fact that the products manufactured by them could attract the Excise Duty, made a deliberate attempt to evade the same by printing 'thinner' instead of 'solvent' on the cartons." 

(For full text of judgment - please see 2007 -TMI - 2168 - (Supreme Court of India)