9911796707
TMI Blog1999 (2) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... these goods was arrived at by the appellants in terms of Section 4 read with Rule 6(b)(ii) of Central Excise (Valuation) Rules, 1975. The duty was paid on the said goods by arriving at the assessable value which included the job charges plus the cost of the raw-materials supplied by their customers. There is no dispute on this point. However, while calculating Rs. 30.00 lakhs clearances for which nil rate of duty was claimed and availed by the appellants in terms of Notification No. 175/86, dated 1-3-1986, only the job charges were taken into account and not the total assessable value on which the duty was paid by the appellants in respect of the goods manufactured on job charges. 1.2 Accordingly, a show cause notice dated 24-2-1989 was issued to the appellants raising a demand of duty of Rs. 5,96,557.55 as differential duty for the period from 21-8-1986 to 31-3-1987 on the ground that while computing the exemption limit of Rs. 30.00 lakhs, aggregate value of all the excisable goods was required to be taken into consideration and not only the job charges received by the appellants. 1.3 On adjudication, the said demand proposed in the show cause notice was confirmed by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arguments, Shri T. Premkumar, learned S.D.R. submitted that it is not a case where the appellant firm was absolved of their responsibility by showing two different values in the RT-12 returns. He submitted that the charges against the appellants are that they had availed the benefit of Rs. 30.00 lakhs under Notification No. 175/86 by wrongly computing the said clearances of Rs. 30.00 lakhs. He submitted that the Department, on receipt of every month s RT-12 returns, is not expected to add the value of clearance in a particular month and arrive at the exemption limit. He submitted that the Explanation I to Notification No.175/86 is to the effect that the values of clearances have to be computed under Section 4. The appellants were paying duty on the assessable value arrived at under Section 4 read with Rule 6(b)(ii), but while computing the total clearance, instead of taking the said assessable value on which the duty was being paid by them, they took into consideration only the job charges. This modus operandi adopted on the part of the appellants, clearly reflects upon their mala fide intention. The appellants were well aware that the duty in respect of the excisable goods manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment cannot be expected to keep the account of the sum-total of the clearances made by a particular assessee, and to bring it to their notice at the point of time when they cross the exemption limit. We also find from the RT 12 returns that the column meant for value under Section 4 has been filled as nil , whereas the assessable value has been reflected under the column - Tariff Value . It was the duty of the appellants to bring it to the notice of the Department the point of time on which they cross Rs. 30.00 lakh clearance, by computing the same in terms of Explanation I to Notification No. 175/86. All the decisions cited by the learned Advocate are distinguishable on facts. On the contrary; we find that the case law relied upon by the learned JDR is more akin to the issue involved in the instant case. It has been observed in the case of Crescent Tool Engineering v. Collector of Central Excise, Bangalore reported in 1996 (86) E.L.T 90 (Tribunal), that there was no ambiguity and as such, there was no ground for misunderstanding on the ground that the assessee had neither sought any clarification from the authorities nor was able to explain their stand. In the instant case, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by them on gate passes (which included the job charges and the cost of raw materials) and the other the invoice value which reflected only the job charges-on RT 12 returns. They were under the bonafide belief that cost of raw materials is not included in computing the exemption limit of Rs. thirty lakhs. Nothing was suppressed or wrongly stated by the appellants, leave apart any wilfulness. There is no contravention of any rule either. In any case none has been pointed out. It is simply the bonafide omission to include the cost of raw materials in computing exemption limit of Rs. 30 lakhs, which is characterised by the Revenue, as wilful suppression or mis-statements to impose huge liability after about 2 to 2 years, when all the information was available with the department. 9. Learned SDR on the other hand has submitted that the department, on receipt of every month s RT 12 return, is not expected to add the value of clearance in a particular month and arrive at the exemption limit. The appellants were paying duty on the assessable value arrived under Section 4 read with Valuation Rule 6(b)(ii), but while computing the total clearance, instead of taking the said assessable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in figures of value of clearances in RT 12 returns but to attribute it to wilfulness of the appellants, in the face of all the relevant documents having been enclosed with the RT 12 returns, will be a wrong finding in my view. 11. Wilfulness is a state of mind. In the absence of any direct evidence of such wilfulness it has to be ascertained from the attendant facts and circumstances of each case. In view of the foregoing facts and circumstances, I do not think that the appellants are guilty of wilful mis-statement or suppression of facts. Contravention of any rules, leave apart any intent in such contravention has neither been alleged nor found against the appellants. Hence the limitation of five years under Section 11A cannot be invoked against the appellants. Notice for recovery of duty has been issued admittedly beyond six months. Hence it is barred by time. Demand of duty against the appellants is, therefore, set aside. 12. In the above facts and circumstances, penalty of Rs. 2 lakhs is unsustainable. This is also set aside. 13. In other words appeal is allowed with consequential relief to the appellants. Dated 30-7-1998 Sd/- (P.C. Jain) Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce value during 1986-87. Under the SRP it is the responsibility of the assessee to determine the duty liability and pay the duty accordingly. The responsibility lies on the assessee to declare the correct assessable value. It is also found from the jurisdictional Superintendent s letter dated 26-6-1986 that the Superintendent directed the said assessee to apply for option for Invoice Price to the concerned Assistant Collector. But the said assessee did not comply with the direction. It has been argued in defence that in the Classification List dated 30-4-1986 the said assessee had inserted in the certificate in Column 7 the Invoice amount and the value of raw materials relating to 1985-86. But the instant demand relates to the period, 1986-87 and nowhere did the said assessee declare the invoice price as nothing but job charge only. It is also seen from the RT 12 returns that the said assessee did not make any progressive clearance value. It is the responsibility of the assessee to give the correct progressive clearance value but the said assessee, while making the progressive total value of clearances, the said assessee had taken only the job charges shown in invoices without taki ..... X X X X Extracts X X X X X X X X Extracts X X X X
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