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TMI Blog2016 (2) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... - Final Order No. 52865/2015 - Dated:- 7-9-2015 - SHRI ASHOK JINDAL, MEMBER (JUDICIAL) AND SHRI B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri B.L. Narsimhan, Advocate For the Respondent : Shri Nanthuk, JCDR and Shri Govind Dixit, DR ORDER Per Ashok Jindal: The appellant is in appeal against the impugned order confirming demand of duty along with interest and imposing penalty by invoking extended period of limitation. Revenue has also filed an application for early hearing of the appeal. 2. As the appeal itself has been listed for final hearing, therefore, the application for early hearing filed by the Revenue has become infructuous. Therefore, the same is dismissed as infructuous. 3. The facts of the case are that the appellant is engaged in the manufacture of motor vehicles (buses) on job work basis, by receiving the duty paid chassis from the automobile manufacturers which was supplied to them free of cost by the chassis manufacturers. The appellant built bodies of the buses on the chassis and cleared the same on payment of duty w.e.f. 1.4.2007. Rule 10 A was introduced to the Central Excise Valuation Rules, 2000 and as per the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clear from the day one not to pay duty as per Rule 10 A of the Rules and deliberately choose not to pay duty, in that circumstances, the allegation of suppression has been proved and extended period of limitation is rightly invoked. 6. Apart from the oral arguments, Shri Govind Dixit, AR filed written arguments which are recorded as under:- The appellant filed a letter with the department on 1.4.2007 explaining therein the method of valuation followed by them as job workers in accordance with Central Excise Law as applicable to job workers, (like the appellants) who manufactured Motor Vehicles (Buses) on chassis supplied by the Principal Manufacturers such as Tata Motors Ltd. In response to the said letter dated 1.4.2007, the Superintendent of Central Excise vide letter dated 1.8.2007 asked for information pertaining to the sale of Motor Vehicles (Buses) which were sold after being dispatched upon competition of job work in their factory. The appellant did not sell the complete Motor Vehicles (Buses) but only dispatched it to the Regional Sale Office (RSO) at Karnal. The appellant provided all other information except relevant information for correct valuation of the Moto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt asked for it in context of Rule 10A(ii) in May, 2008. Tata Motors and Appellant together, had agreed to the contractual terms of their mutual transactions and together did not disclose to the department until investigations took place. Such a contractual arrangement between the Appellant and M/s. Tata Motors Ltd. is unlawful under Section 23 of the Indian Contract Act, 1872. The object of such an agreement was to defeat the provisions of Rule 10 A (ii) of the Central Excise Act, 1944 which had come onto the statute book w.e.f. 1.4.2007. Section 23 of the Contract Act says that the object of an agreement is unlawful if it would defeat the provisions of any law. The deliberateness of the acts of the appellant to prevent the material information from reaching the department is substantiated by the facts of the events as they took place during the course of investigations and are recorded in paragraph 5 to 10 of the show cause notice in question. The Unlawful Object of the agreement between the appellant and M/s. Tata Motors is substantiated by the judgement of the Hon ble Supreme Court of India in the case of M/s. Mc Dowell Co. Ltd. Vs. Commercial Tax Officer dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant has intimated to the Department the method of valuation on 1st April, 2007, wherein it was stated as under:- 1. We are undertaking the activity of body building of vehicles at our factory. The chassis manufacturer (hereinafter referred to as CM) manufacturers the chassis fitted with engines for motor vehicles and entrusts the body building work to us. CM clears the chassis on payment of excise duty to us for which cenvat credit is taken by us. We charge consolidated sales consideration for our body building work that also includes the cost of raw materials procured by us, other body building costs our profit mark up. 2. For the purpose of body building, we purchase various raw materials on our own account and undertake the body building work. We understand that the clearance of vehicle after body building to CM amounts to sale under the Central Excise Law (Section 2(h) of Central Excise Act, 1944) since there is a transfer of possession of body from us to CM. We also understand that the clearance of vehicle after body building to CM amounts to sale under Section 4 of the Sale of Goods Act, 1930 since there is a transfer of property in body from us to CM. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not proved and as per the decision of the Hon ble Apex Court in the case of Pushpam Pharmaceuticals Company Vs. CCE, Bombay reported in 1995 (75) ELT 401 (SC), the Hon ble Apex Court has held as under:- A perusal of proviso to Section 11 A indicates that the expression suppression of fact has been used in company of such strong words as fraud, collusion or willful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. 11. In the light of the observation of the Hon ble Apex Court, we find that in the case in hand, the appellant has disclosed their method of valuation to the department on 1.4.2007. The valuation was known to the Department w.e.f. 1.4.2007 and the Department failed to do any positive act to issue show cause notice within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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