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TMI Blog2021 (11) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... five years from the relevant date. Suppression of facts or not - HELD THAT:- The suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty - In EASLAND COMBINES VERSUS COLLECTOR OF C. EX., COIMBATORE [ 2003 (1) TMI 107 - SUPREME COURT] , the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation. In the present case, what is seen is that the audit was conducted between June 17, 2011 to June 22, 2011 and the show cause notice refers to this audit only. The notice, therefore, should have been issued within one year from the relevant date and there is no good reason as to why the Central Excise Officer should have waited till March 19, 2015 to issue the show cause notice. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply stating that principal inputs for solar power systems were exempted from excise duty and thus, no CENVAT Credit was available to them. On the remaining inputs, either the appellant did not avail CENVAT Credit and if it had taken them inadvertently, then the same was suo moto reversed by the appellant on April 30, 2011 prior to the audit inspection. The appellant also stated that it had maintained separate records for exempted and taxable goods. 4. However, a show cause notice dated March 19, 2015 was issued mentioning therein that the appellant manufactured 48 Solar Power Systems during the financial year 2010-11 on which no excise duty was paid. The appellant also manufactured dutiable goods. Thus, the appellant manufactured both dutiable as well as exempted goods. However, the appellant has not been maintaining separate books of accounts and therefore, rule 6(3) of the 2004 Credit Rules would be attracted making the appellant liable to pay 5% of the total value of exempted goods sold by it. The show cause notice also stated that information relating to principal inputs in Form ER-5 under rules 9A(i) and 9A(ii) of the 2004 Credit Rules was not submitted for the financial y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt nearly four years from the audit inspection alleging non-maintenance of separate records. The appellant submitted a reply dated April 25, 2015 and thereafter, the order dated August 08, 2016 was passed by the Adjudicating Authority. 11. The submission of learned counsel for the appellant is that under section 11A (1), the Central Excise Officer could have served a notice upon the appellant within one year from the relevant date i.e. October 10, 2011 but in the instant case the show cause notice was issued on March 19, 2015 without there being any reason for invoking the extended period of limitation under sub-section (4) of section 11A of the Excise Act. 12. To appreciate this submission, it would be appropriate to reproduce the relevant provisions of sub-sections (1) and (4) of section 11A of the Excise Act and they are as follows: 11A . Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the provider of the output service shall pay an amount equal as 5% of value of the exempted service or ii. The manufacture of goods or the provider of out-put service shell pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in, or in relation to the manufacturer of exempted goods or for provision of exempted services subject to the condition procedure specified in Rules 3(A). 4 . It has also been observed that- i. No separate account for exempted goods was maintained and submitted in Central Excise department on monthly basis . ii. Information relating to principal inputs in form of ER-5 under rule 9A(i) and 9A(ii) of CENVAT credit rules 2004 has not been submitted in Financial Year 2010-11. Also, other returns like ER-6 and ER-7 had not been submitted by the aasessee. iii. Separate stock register and RG 23 Part-I for exempted goods had not been maintained by the assessee. 5. In view of the forgoing paras the party have suppressed the facts with intent to evade the Central Excise duty and have disclosed only after detection by Audit. (emphasis supplied) 15. The appeal filed by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the SCN alleging non- payment of excise duty on Solar Power Systems was issued by the Ld. Assistant Commissioner in 2015 after invoking the extended period of limitation. It is submitted that the SCN was thus issued after an inordinate delay and is unsustainable. (emphasis supplied) 16. The Commissioner dealt with this issue in paragraphs 8 and 9 of the order and the said paragraphs are reproduced below: 8. As a result, as discussed, as there exists liability on them in terms of the Impugned Order, its attendant consequences follow as a matter of course. Interest under Section 75 of the Finance Act, 1994 would be payable by them as ordered therein. I further observe that in the present system of self-assessment documents like invoices and other transaction details are not supplied to the Department, the intention will have to believed as that of evasion by way of suppression or mis-declaration. Once the details are not submitted to the Department, it amounts to mis-declaration or suppression which is rightly invoked in the case before me. I, therefore, conclude that the element of suppression with intent to evade payment of service taxis conspicuous b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise has not been paid for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Excise Act with intent to evade payment of duty, the Central Excise Officer shall, within one year from the relevant date, serve notice on the person requiring him to show cause why he should not pay the amount specified in the notice. However, sub-section (4) of section 11A of the Excise Act provides that where any duty of excise has not been levied or short paid by reason of fraud or collusion or any wilful mis-statement, the notice can be issued by the Central Excise Officer within five years from the relevant date. 19. The provisions of section 11A of the Central Excise Act came up for interpretation before the Supreme Court in Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay [ 1995 (78) ELT 401 (SC) ] . The Supreme Court observed that section 11A empowers the Department to reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to proceed to recover duties in the manner indicated in the proviso to Section 11-A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to CEGAT to come to a conclusion that the appellant was guilty of suppression of facts. (emphasis supplied) 22. In Easland Combines, Coimbatore vs. Collector of Central Excise, Coimbatore [ (2003) 3 SCC 410 ] , the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation. 23. The aforesaid decisions of the Supreme Court were relied upon by the Supreme Court in Uniworth Textiles Ltd. vs. Commissioner of Central Excise, Raipur [ 2013 (288) ELT 161 (SC) ] and the relevant portion of the judgment is reproduced below: 12. We have heard both sides, Mr. R.P. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e show cause notice refers to this audit only. The notice, therefore, should have been issued within one year from the relevant date and there is no good reason as to why the Central Excise Officer should have waited till March 19, 2015 to issue the show cause notice. The extended period of limitation, for this reason alone, could not have been invoked. Even in a case of self-assessment, the Department can always call upon an assessee and seek information and in this case an audit objection was raised, to which a reply was submitted. The Department cannot be permitted to invoke the period of limitation by merely stating that it is a case of self-assessment. This apart, an assessee is called upon to provide only that information that is required to be furnished in the self-assessment form. There is no averment in the show cause notice, nor there is any finding in the order passed by the Commissioner (Appeals) that the appellant had provided incorrect information to any matter required to be stated in the self-assessment form with intent to evade payment of service tax. All that has been stated is that the transaction details were not supplied to the Department and merely because of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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