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TMI Blog2015 (2) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... nt (Technical)’s letter dated 27-8-2001 to the Jurisdictional Superintendent of Central Excise. In view of these facts, the Department cannot allege that the appellant have suppressed the relevant facts from the Department. As regards, the allegation that the appellant during 2002-2003 had shown trading of goods worth about ₹ 33 lakhs and on inquiry, it was found that the persons from whom they claim to have produced those goods have not supplied, it is seen that the goods which are claimed to have been purchased from M/s. PH Steel, M/s. Jay Gee Steels, M/s. S.N. Traders and M/s. Ranji Products are the complete sets of components for boxes and the components of boxes like M.S. Brackets etc. The dispute in this case is in respect of the ammunition boxes manufactured by the appellant supplied to Ordnance factories of the Ministry of Defence in respect of which the appellant had informed the Department that they are availing of SSI exemption to the extent available and they would be availing the Notification No. 62/95-C.E. It is, therefore, not understood as to how the allegation that the appellant showed bogus purchase of components for boxes from various traders is relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 8/2002-C.E. and that goods manufactured by them being supplied to Defence are also fully exempt from duty under Notification No. 62/95-C.E., dated 16-3-1995. 1.2 Subsequently the Department was of the view that though, the goods to be manufactured by the appellant are covered by Serial No. 16 of the Notification No. 62/95-C.E., the same are not eligible for the benefit of the exemption, as this exemption is applicable only in respect of the goods manufactured by a factory belonging to Central Government where the goods manufactured are intended to be supplied to any Department of Central Government for its use, while in this case, the assessee is not factory belonging to the Central Government. It is on this basis that a show cause notice dated 1-4-2005 was issued to the appellant firm for demand of duty amounting to ₹ 13,03,942/- in respect of clearances of ammunition boxes during period from 2001-2002 and 2002-2003 along with interest thereon under Section 11AB and also for imposition of penalty under Rule 26 of the Central Excise Rules, 2002, on the appellant firm under Section 11AC and imposition of penalty on Sh. M.S. Sawhney, partner of the appellant firm. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant firm as well as on its partner Sh. M.S. Sawhney. 1.6 The appeals from both the sides were disposed of by Hon ble Punjab Haryana High Court vide order dated 9-12-2014 by which Hon ble High Court set aside the Tribunal s order and remanded the matter to the Tribunal for fresh adjudication on the point as to whether there was wilful misstatement or suppression of fact etc., on the part of the appellant firm, so as to justify the invoking of extended period under proviso to Section 11A(l) of Central Excise Act, 1944 and invoking Section 11AC for imposition of the penalty on appellant firm. In this regard, observations of Hon ble High Court are reproduced below : A perusal of the order passed by the Tribunal reveals that while setting aside penalty, the ld. Tribunal has recorded a positive finding that there is no suppression of relevant facts. The question of suppression of material facts was germane to both issues i.e. assumption of jurisdiction by the Assessing Authority to re-assess and penalty. The Tribunal having held that there is no suppression of material facts while deciding the question of penalty, was required to apply this finding to the legality of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s letter dated 27-8-2001 addressed to the Range Superintendent informed that though it is a fact that unit is not a Central Government unit, but is manufacturing and supplying the goods falling under Heading 7310 to ordnance factories of the Ministry of Defence, the goods would still be exempt from duty under Notification No. 62/95-C.E. [Serial No. 16(ii)], and that the sub-clause of Serial No. 16 of table to Notification No. 62/95-C.E. should be read together and not in isolation, that this fact has also been acknowledged by the Joint Commissioner in para 52 of the impugned order, that in view of this, the appellant cannot be accused of any wilful suppression of facts or misstatement with intent to evade the duty and hence neither extended period under proviso to Section 11A(i) would be invokable nor the penalty under Section 11AC would be imposable, and that when the demand against the appellant firm itself is not sustainable, there is no question of imposition of penalty under Rule 26 on its partner Shri M.S. Sawhney. He also pleaded that the ammunition boxes had been supplied to Ordnance factories of Ministry of Defence against the supply orders issued by the Ministry of Defenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02-2003 they were availing SSI exemption Notification No. 8/2001-C.E. and 8/2002-C.E. respectively under which the clearances for home consumption in a financial year upto Rs. one crore were eligible for exemption. After crossing the exemption limit also, they did not pay any duty and in this regard they under their letter dated 11-4-2001 and 8-4-2002 addressed to the Deputy Commissioner had informed the Department that while they are availing of SSI exemption, the goods manufactured by them being supplied to Defence are otherwise fully exempt from duty under Notification No. 62/95-C.E. (Serial No. 16). There was no response from the Department informing the appellant that they are not eligible for the Notification No. 62/95-C.E. On the contrary, from para 52 of the order-in-original passed by the Joint Commissioner, it is seen that another manufacturer M/s. Jai Forging and Stamping (P) Ltd., located in the same industrial area and falling under the same division was also manufacturing same goods for supply to Defence and in his case the benefit of exemption Notification No. 62/95-C.E., dated 16-3-1995 had been extended. Thus, from this it is clear that during the period of dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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