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TMI Blog2019 (4) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... ted for calculation thereof, if it intended to suppress facts so as to evade payment of excise duty and that these communications were not responded to by the Central Excise Department. From the proviso to Section 11-A, it is clear that the extended period can be invoked only if there is fraud, collusion, wilful misstatement, suppression of facts or contravention of the Central Excise Act or the Rules made thereunder with intent to evade excise duty - In the instant case, there is no allegation of fraud or collusion. As regards willful misstatement or suppression of facts, the question arises as to whether suppression of facts per se justifies invoking the extended period. In the instant case, the Settlement Commission expressly adverted to the fact that the First Respondent would not have sought for a clarification from the Central Excise Department as to the correct method of calculating duty on depot sales on stock transfer basis or paid the differential duty, with the method of valuation, if there was intention to evade excise duty. Thus, the order of the Settlement Commission does not suffer from any infirmities and is not liable to be interfered with by this court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid assessable values, the first respondent paid the aggregate differential excise duty of ₹ 2,35,616/- and requested the Superintendent of Central Excise to consider the above mentioned payment of differential duty for the months of April to November 2001 along with the return submitted for assessment. This practice of paying the differential duty, separately, in respect of goods removed from the depots continued in the following assessment years. From the documents on record, it appears that by letters dated 15. 11. 2003, 08.12.2003, 06.12.2004, 14.02.2005 and 30.08.2005, the First Respondent communicated to the Superintendent of Central Excise that differential duty was being paid in respect of clearances on stock transfer basis from the two depots. 4.In these facts and circumstances, the Petitioner issued Show Cause Notice No. 2/06 dated 17.01.2006 to the First Respondent wherein it was stated that the First Respondent had been clearing goods on stock stock transfer from the depots at Bangalore and Ernakulam from 2001 onwards. It was further stated that the First Respondent had not requested the jurisdictional Assistant/Deputy Commissioner of Central Excise f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent has stated that the show cause notice was issued by invoking the extended period under the proviso to Sub-Section 1 of Section 11 A of the Central Excise Act and that the Central Excise Department was not justified in invoking the extended period in this case. This statement was made on the basis that the applicant therein/1st Respondent herein removed the excisable goods to the depots under proper Central Excise invoices on payment of duty and differential duty and also informed the Central Excise Department about the said payment of differential duty. In effect, it was pleaded by the first respondent that the Central Excise Department is aware of all the facts and that there was no suppression. It was further pointed out in the said Application that the Applicant therein/1st Respondent herein had requested clarifications from the Department about the method to be adopted in arriving at the assessable value for clearances from the depots even prior to the demand in the show cause notice. All the letters relating to the request for clarification or payment of differential duty were expressly adverted to. Hence the First Respondent submitted that facts were not suppressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the Settlement Commission has expressly stated that if it was the intention of the applicant therein to suppress information or evade payment of duty, the Department would not have been asked for advice and differential duty would not have been paid. On the basis of the said analysis, the Settlement Commission concluded that there was no suppression or willful misstatement on the part of the applicant therein and that therefore the invoking of the extended period is not sustainable. 8.The Settlement Commission proceeded to take note of the fact that out of the admitted Excise Duty of ₹ 34,87,039/-, a sum of ₹ 25 lakhs had been paid prior to the receipt of the show cause notice and another sum of ₹ 5 lakhs was paid on 20.01.2006, i.e. 30 days from the date of issue of the show cause notice. In view of the said facts, the Settlement Commission recorded that it is inclined to grant immunity from interest because the bulk of the admitted amount was paid before issue of the show cause notice. Accordingly, the Settlement Commission granted the Applicant therein/1st Respondent herein immunity from interest, fine, penalty and prosecution under the Central Excise Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of depot sales, albeit belatedly. In these circumstances, he submitted that there was no suppression of facts or misstatement by the First Respondent. He further submitted that all these facts were duly pleaded before the Settlement Commission and that the Settlement Commission carefully analysed the relevant facts before concluding that it was not a case of suppression of facts with intent to evade excise duty. With a view to substantiate the said contentions, the learned counsel for the First Respondent referred to several authorities, which are set out below: 1)Tamil Nadu Newsprint and Papers Ltd., Vs. Settlement Commissioner, Chennai reported in 2017(356) E.L.T. 202 (Mad.)(the Tamil Nadu Newsprint case). 2)Maan Pharmaceuticals Ltd., Vs. Union of India reportedc in 2014(307) E.L.T. 642(Guj). 3)Union of India Vs. Hognas India Limited reported in 2006(199) E.L.T.8(Bom). 4)Commissioner of Central Excise, Jalandhar Vs. Royal Enterprises reported in 2016 (337) E.L.T. 404 (Mad.). 5)Muhammed Ismail Mills Vs. Gestat Chennai reported in 2015 (315)E.L.T. 404 (Mad), 6)Uniworth Textiles Ltd., Vs. Commissioner of Central Excise, Raipur reported in 2012(288) E.L.T.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 12.This Court has carefully considered the affidavit, counter affidavit, documents, oral submissions and the written submissions of the First Respondent. 13.The limited question to be decided in this case is whether the order of the Settlement Commission is liable to be interfered with by this court. As regards the fact that freight charges ought to have been added for calculating the excise duty on depot sales on stock transfer basis, there is no dispute and the judgments of the Hon'ble Supreme Court in the ESCORTS JCB case and the PRABHAT ZARDA FACTORY case, which were adverted to by the learned counsel for the Petitioner, settle the issue. As regards the jurisdiction of the Settlement Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by the reason of- ( a ) fraud; or ( b ) collusion; or ( c ) any wilful mis-statement; or ( d ) suppression of facts; or ( e ) contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by any person chargeable with the duty, the Central Excise Officer shall, within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under section 11AA and a penalty equivalent to the duty specified in the notice. 15.From the proviso to Section 11-A, it is clear that the extended period can be invoked only if there is fraud, collusion, wilful misstatement, suppression of facts or contravention of the Central Excise Act or the Rules made thereunder with intent to evade excise duty. In the instant case, there is no allegation of fraud or collusion. As regards willful misstatement or suppression of facts, the question arises as to whether suppression of facts per se justifies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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