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TMI Blog2013 (9) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... e invocation of extended period was correct in the second show cause notice. Having come to this conclusion the second contention was automatically dismissed - There was no dispute that the appellants were maintaining parallel set of invoices and also misdeclaring value of the goods involved - It was only based upon the intelligence and subsequent investigation extending over a period of three years covering more than 60-70 customers and analysis of various incriminating records seized during the search operation that the show cause could be issued. Duty, Penalty and Interest on first appellant was correctly imposed - As far as penalty on the second appellant was concerned, we find that all the evasion was being done under his active directions and was therefore liable to penalty – Decided against Assessees. - E/2253,2254/2006-Mum - - - Dated:- 30-7-2013 - S S Kang And P K Jain, JJ. For the Appellant : Shri Vinay Ansurkar, Adv. For the Respondent : Shri C S Biradar, Adv. PER : P K Jain Brief facts of the case are that Appellants are engaged in the manufacture of off-set printing machines. Based upon an intelligence, officers of Directorate General of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es imposed penalties on first appellant and second appellant besides other persons. Duty amounting to Rs. 50,01,900/- (Fifty Lakhs One Thousand Nine Hundred Only) was confirmed under proviso to Section 11A (1) on first appellant and equal amount of penalty besides interest under Section 11AB. In addition penalty of Rupees Two lakhs only was imposed on second appellant. 4. Aggrieved by the above order, the appellants are before the Tribunal. Appellants are not disputing the impugned order on merits or quantification etc. They have pleaded two arguments. The first and main argument is that department has issued first show cause notice as 14.1.2003 to the appellant and based upon the same intelligence and investigation second show cause notice is issued by invoking proviso to Section 11A i.e. extended period. According to Ld. Advocate this is not permitted in law, department cannot invoke extended period in the second show cause notice as held by various decisions of Hon'ble Supreme Court. They quoted certain judgments of Hon'ble Supreme Court Tribunal to support this contention. The second argument is that in the facts and circumstances of the case, proviso to Section 11A cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, undervaluation etc. In fact two more units were using the "S.O.G." brand name, they were liable to pay duty. Show cause notice considered these units as dummy units and duty for the clearance of these units were also demanded from first Appellant but was dropped as Commissioner found that the two units were in existence and therefore cannot be considered as dummy units and duty was not demanded from the said units. However this is not an issue before us. Issue before us is liabilities of first appellant and second appellant, as adjudicated by the Commissioner. 8. The main contention of the appellants is that department is prohibited from issuing second show cause notice invoking extended period as held by the Hon'ble Supreme Court in various judgements. We note that the demand confirmed in this impugned order is Rs. 50,01,900/- (Fifty Lakhs One Thousand and Nine Hundred Only). The main contention of the appellants that department is prohibited from issuing second show cause notice. We note the following:- (i) The first show cause notice was issued for confiscation of three machines seized on 15.10.2002 from three notices in Kolhapur. They are not noticees in the second c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, (as) if for the words (one year), the words "five years" were substituted. 10. First of all we note that there is no provision under the Central Excise Act, which prohibits issuing more than one show cause notice to an appellant. Section 11A also does not stipulate any such things. In our view any number of show cause notice can be issued under the said Section to an assessee. The extended time limit can be invoked only in situation where the short-levy or erroneous refund is by reasons of fraud, collusion or willful misstatement or suppression of facts or contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking the extended period. Applicants case was that it was his bona fide belief that the impure carbon dioxide which was produced is not marketable commodity and therefore not chargeable to excise duty. It is in this context that the Supreme Court stated as under:- "9. Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. We agree with the view taken in the aforesaid judgments and respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellant." 11.2 The other case was quoted in ECE Industries Ltd (supra). The facts of the case were as under: "3. The appellants were using parts, in respect of which the Modvat credit was availed. Even though they have not paid duty, they did not reverse the credit. The Department, therefore, issued show cause notices on 28th May, 1993 and 4th Novemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to suppression of facts must be clear and explicit so as to enable the notices to reply thereto effectively. Here again the issue was whether the activity carried out by the appellant would amount to manufacture or not and was a debatable issue. 11.6 Another case mentioned is that of Adhunic Metaliks Ltd. (supra), in this case, a show cause notice was issued on 9.1.2006 demanding duty for the period from December 2004 to March 2005 on the grounds of suppression of facts with intent to evade payment of duty. Another show cause notice was issued on 17.1.2008 demanding duty for the period from April, 2004 to November, 2004 on the same ground Tribunal following the decision of Hon'ble Supreme Court in the case of Nizam Sugar Factory (supra) allowed the appeal. In the present case, the first show cause notice is relating to confiscation of the three machines while the second show cause notice is relating to demand of duty for the three years period. The first show cause notice itself indicated that the separate show cause notice will be issued for demand of duty. Both the show cause notices did not demand duty. 11.7 Another case law mentioned by the Ld. Advocate is that of M/s. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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