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TMI Blog2019 (7) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... t has attached the audit report of two audits conducted in June 2006 and November 2006 wherein the audit party did not raise any objections with regard to this issue of valuation and clearances made to the sister concern. Further we find that the Department has not brought any evidence on record to show that there was suppression of facts with intent to evade payment of duty. Extended period of limitation - HELD THAT:- In the present case, invocation of extended period of limitation is not sustainable because the Department was aware about the clearances made by the appellant in June 2002 itself but they issued show-cause notice only in 2010 after 8 years which according to us is completely barred by limitation of time. Since the entire demand is barred by limitation, we do not think it appropriate to give findings on merit. Appeal allowed - decided in favor of appellant. - E/1144-1145/2011-DB - Final Order No. 20513-20514 / 2019 - Dated:- 1-7-2019 - MR. S.S GARG, JUDICIAL MEMBER AND MR. P. ANJANI KUMAR, TECHNICAL MEMBER For the Appellant : Shri H.S ANANATHA PADMANABHA ADV For the Respondent : Shri K. Murali, Superintendent(AR) ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 8 of Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000. iii. (a) the three units viz. (i) M/s. Khoday India Ltd., (ii) M/s. Khoday Glass Company and (iii) M/s. Khoday RCA Industries are inter related; (b) they are not adopting the valuation as required under the Rule 8 of Central Excise Valuation Rules (Determination of Price of Excisable Goods) 2000; (c) they had initially stated that these units are not inter related and their transactions are at arms length; (d) later they accepted that these units are inter related and they are adopting the valuation as per proviso to Rule 9 read with Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, however, they were not adopting the valuation as per Rule 8 of Central Excise Valuation Rules, 2000 and are clearing the goods by undervaluing the goods; (e) they were all-along misleading the department with a clear intention to evade duty. (f) by misleading the department all along they have evaded the Central Excise duty to the tune of ₹ 71,83,361/-. (g) it is also appeared that Shri K.P. Prakash, Vice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al buyers. The further submitted that the appellants have generated more revenue to the exchequer by supplying the goods to their sister concern. He has also given the details regarding the clearances to the sister concern as well as the 3rd party but the same has never examined by the Department. He further submitted that the perusal of these invoices clearly shows that he has not indulged in undervaluation while clearing the goods to the sister concern and at times, he has charged more price from the sister concern than from the 3rd party buyers. He also submitted that when the goods are sold to the sister concern as well as to the 3rd party buyers, Rule 9 is not applicable. In support of his submission, he relied upon the decision in the case of CCE, Pune Vs. Arofine Polymer Ltd. [2007(214) ELt 241 (Tri. Mumbai)] wherein it was held that Rule 5 is applicable when goods are sold to or through related person and Rule 9 is not applicable when sale to both related and independent buyers are effected. Similarly in the case of Aquamall Water Solutions Ltd. Vs. CCE, Hyderabad-II [2005(182) ELT 1196 (Tri. Bang.)], the Tribunal has held that sales made to principal holding company as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitive other than mere inaction or failure on the part of manufacturer is proved. Conscious or deliberate withholding of information by manufacturer is necessary to invoke larger limitation period. Expression suppression of facts in the proviso to Section 11A(1) are to be interpreted strictly, because, it has been used in the company of such strong words as fraud, collusion or wilfull misstatement. Where facts are known to both the parties, the omission by one to do what he might have done does not render it suppression of facts. For this submission, he relied upon the following decisions:- i. Chemphar Drugs Liniments Vs. CCE [1989(40) ELT 276 (SC)] ii. Cosmic dye Chemicals Vs. CCE [1995(75) ELT 721 (SC)] iii. Pushpam Pharmaceuticals Co. Vs. CCE [1995(78) ELT 401 (SC)] iv. Pahwa Chemicals Pvt. Ltd. Vs. CCE [2005(189) ELT 257 (SC)] 5. On the other hand, the learned AR defended the impugned order and submitted that the appellant has suppressed the facts of clearances of goods to the sister concern. He further submitted that the appellant has not followed the Valuation Rule while clearing the goods to the sister concern and therefore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification was lost. 4 . In this case, as set out hereinabove, all facts were within the knowledge of the Department. Therefore, even if the ratio of Nizam Sugar Factory s case (supra) is applied, there is no justification for invoking the extended period of limitation. 5 . It follows that limitation is not available, no penalty can also be imposed. 6.2. In view of this consistent law laid down by the Apex Court regarding the circumstances in which extended period can be invoked, we find that in the present case, invocation of extended period of limitation is not sustainable because the Department was aware about the clearances made by the appellant in June 2002 itself but they issued show-cause notice only in 2010 after 8 years which according to us is completely barred by limitation of time. Since the entire demand is barred by limitation, we do not think it appropriate to give findings on merit. Accordingly, we set aside the impugned order on limitation alone. Consequently, we also drop the penalty on the appellant and Shri K.P. Prakash. 7. In the result, both the appeals are allowed. (Order was pronounced in Open Court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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