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TMI Blog2019 (7) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, in the absence of element of mens area, the appellant s conduct cannot be construed to fall within the five elements as required for invoking the extended time proviso - the charges of willful suppression or mis-statement of facts cannot be invoked The SCN is barred by limitation - appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be included in the selling price of manufactured product have not been included. In the present case, for example, the goods are to be manufactured using the technology, standard and technical knowhow relating to the product which will be supplied by M/s Zydus. But such elements of cost have escaped the agreed price between the appellant and M/s Zydus. 11. Once we conclude that the appellant has acted as a job worker for M/s Zydus the mischief of Rule 10A of the Valuation Rules becomes applicable and the goods are required to the valued on the basis of the price at which the principal manufacturer, M/s Zydus sells such goods from their depot. 12. In view of above discussion, we are inclined to uphold the findings of the lower authorities which are on the above lines." 2. Thus, the appeal of the appellant was dismissed holding that the appellant needs to discharge the Central Excise duty on the value on which the goods were actually sold by the principal manufacturer namely M/s. Zydus Wellness Ltd. to their unrelated buyers. 3. In the above mentioned Final Order, the appellant have moved a Miscellaneous application for rectification of mistake and recall of the Final ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wellness Ltd. It is contended that M/s. Zydus Wellness Ltd. has not paid any other price or consideration other than the price of goods which have been charged by them from M/s. Zydus Wellness Ltd. on Central Excise invoice raised by them. The learned advocate has further taken shelter of various decisions including that of Hon‟ble Apex Court on the issue to support his case. The summary of certain decisions as submitted by learned advocate is reproduced hereinbelow:- (i) The Central Board of Excise and Customs vide Circular No. 268/102/96-CX, dated 14.11.1996 has clearly directed that ingredients of suppression of facts, willful mis-statement etc. have to be clearly substantiated, as laid down by the Hon‟ble Supreme Court in the case of CCE, vs. HMM Ltd. reported in [1995 (76) ELT 497 (SC)] for invoking extended time period for demand of Central Excise duty. (ii) The Hon‟ble Supreme Court in the case of Uniworth Textiles Ltd. vs. CCE, Raipur reported in 2013-TIOL-13-SC-Cus has held that mere non-payment of duties is not equivalent to collusion or willful mis-statement or suppression of facts. (iii) The Hon‟ble Supreme Court in the case of Cosmic Dye C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f, all the facts are within the knowledge of Department, extended period of limitation, is not available as held by Honourable Apex Court, in case of Nizam Sugar Factory versus CCE, reported in [2006 (197) ELT 465 (SC)], enclosed marked as Annexure:18, hereto. The Central Board of Excise & Customs, vide Circular No.5/92-CX-4, dated 13.10.1992 (Annexure:19, hereto), has clarified that mere non-declaration, is not sufficient, for invoking longer period of limitation. Non payment of Excise duty, on waste and scrap of cables, is also due to the judgements, delivered by the Hon‟ble Tribunals and Supreme Court, on the same subject and it cannot be said that these judgements and legal position, are not in the knowledge of the Department. It is therefore, respectfully submitted that the Show Cause Notice, is barred by limitation, as ingredients for invoking extended period, are absent." 5. It has further stressed that the Tribunal while deciding the appeal vide its Final Order No. 50258/2018 dated 19 January, 2018 has not considered the above judicial pronouncements though same were pressed by them. It has further been submitted that all these documents are part of their written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee i.e. (a) fraud; (b) collusion; (c) willful mis-statement; or (d) suppression of facts or contravention of any of the provisions of this Act or rulings made thereunder with intent to evade payment of duty. We find that the appellants have been filing their ER 1 return regularly before the Department and declaring the price which have been charged by them from M/s. Zydus Wellness Ltd., on the invoices and the price on which the Central Excise duty has been paid. The Department has not challenged the authenticity, genuineness of such invoices neither they have proved that the appellants have received any other consideration other than the price which is indicated on the invoices for clearance of excisable goods. We feel that the ingredients which are the pre-requisite for invoking the extended time proviso under section 11A (4) of the Central Excise Act, 1944 are absent in the facts of this case. Thus, in the absence of element of mens area, the appellant‟s conduct cannot be construed to fall within the five elements as mentioned above required for invoking the extended time proviso. To us it appears that appellants‟ conduct has always been transparent and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with intent to evade duty. The next set of words "contravention of any of the provisions of this Act or Rules‟ are again qualified by the immediately following words "with intent to evade payment of duty.‟ Therefore, there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful." 2. Cosmic Dye Chemical vs CCE, Bombay [1995 (75) ELT 721 (SC)] wherein it has been held as under: "6. Now so far as fraud and collusion are concerned, it is evident that the requisite intent, i.e., intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word "wilful" preceding the words "mis-statement or suppression of facts" which means with intent to evade duty. The next set of words "contravention of any of the provisions of this Act or Rules" are again qualified by the immediately following words "with intent to evade payment of duty". It is, therefore, not correct to say that there can be a suppression or mis-statement of fact, which is not wilful and yet cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion had been practiced or that the assessee was guilty of wilful misstatement or suppression of fact. In the absence of any such averments in the show-cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11-A(1) of the Act.' It was held that the show cause notice must put the assessee to notice which of the various omissions or commissions stated in the proviso is committed to extend the period from six months to five years. That unless the assessee is put to notice the assessee would have no opportunity to meet the case of the Department. It was held : ...There is considerable force in this contention. If the department proposes to invoke the proviso to Section 11-A(1), the show-cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the Excise Department places reliance on the proviso it must be speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was plausible, and also noted that the Department had full knowledge of the facts about manufacture of all the goods manufactured by the respondent when the declaration was filed by the respondent. The respondent did not include the value of the product other than those falling under Tariff Item 14E manufactured by the respondent and this was in the knowledge, according to the Tribunal, of the authorities. These findings of the Tribunal have not been challenged before us or before the Tribunal itself as being based on no evidence. 9. In that view of the matter and in view of the requirements of Section 11A of the Act, the claim had to be limited for a period of six months as the Tribunal did. We are, therefore, of the opinion that the Tribunal was right in its conclusion. The appeal therefore fails and is accordingly dismissed." 9. In view of the above, without touching the findings of the Final Order No. 50258/2018 dated 19 January, 2018 on merits, we hold that show cause notice is barred by limitation and, therefore, we hold that the impugned order in appeal is legally not sustainable. Accordingly, we set aside the same and allow the appeal. (operative part of the order ..... 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