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TMI Blog2022 (6) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise duty liability for the period prior to October 2006. To that extent, demand of Central Excise duty liability which is confirmed for the period from 01.04.2004 to 31.09.2006 is liable to be set aside. Remaining demand for the period i.e. October 2006 falling under five years of limitation and beyond one year of limitation - HELD THAT:- Apart from the general aversion, there is no evidence to show that duty has not been paid by way of fraud or suppression of facts with intention to evade payment of duty. The case has been booked on the basis of audit objection by scrutinizing the financial records of the Appellant. It is well settled law and as held by the Tribunal in the case of ADITYA COLLEGE OF COMPETITIVE EXAMINATIONS VERSUS COMMISSIONER OF CENTRAL EXCISE, VISAKHAPATNAM [ 2009 (4) TMI 134 - CESTAT, BANGALORE] and M/S. MEGA TRENDS ADVERTISING LTD. VERSUS COMMR. OF CENTRAL EXCISE SERVICE TAX, LUCKNOW [ 2019 (5) TMI 1027 - CESTAT ALLAHABAD] that extended period of five years cannot be invoked in the case of audit objection. There is no evidence in respect of mala fide intention on the part of the Appellant hence the present show cause notice is barred by l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luing Rs.2,46,24,602/- in the cost of MS Ingots consumed captively for manufacture of MS Round cleared on transaction value during the disputed period, therefore, by applying Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, the Appellant was required to show cause as to why Central Excise duty of Rs.40,06,523/- should not be demanded along with interest and equal penalty from the Appellant. The show cause notice has been adjudicated by the Ld.Commissioner vide ex parte Order-in-Original dated 14.02.2018 wherein Central Excise duty of Rs.40,06,523/- was confirmed along with interest and imposition of equivalent penalty. Being aggrieved, the Appellant filed Appeal before the Ld.Commissioner(Appeals) challenging the demand inter alia on the merits of the case, violation of principles of natural justice and on limitation as well. The Ld.Commissioner(Appeals) dismissed the Appeal filed by the Appellant vide the impugned Order-in-Appeal dated 31.05.2019. Hence the present Appeal before the Tribunal. 3. Shri Jitin Singhal, Ld.Advocate, appearing on behalf of the Appellant vehemently argued that the demand in the present case is completely time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on merits of the case is not sustainable in the eyes of law. It was submitted that the department erred in relying upon Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 which is not applicable to the facts of the present case. It was submitted that in the present case, the Appellant has sold the excisable goods and Rule 8 is applicable only when the goods are exclusively captively consumed, which is not the fact of the present case. It was further submitted that in the present case, Sponge Iron is a raw material for MS Ingots and MS Ingot is a raw material for MS Round. During the disputed period, the Appellant had cleared MS Ingots to their customers and also consumed captively in the manufacture of MS Round. The price of MS Round during the period of dispute had been determined purely by commercial considerations, market conditions and quality of MS Round. It is important to note that in manufacture product is determined by the demand and supply and depending upon the demand and supply, the prices are increased or decreased and the manufacturer in this regard cannot always keep the process above the cost of production. It is further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in the case of Aditya College of Competitive Exam. Vs. CCE, Visakhapatnam (supra) and Mega Trends Advertising Ltd. Vs. CCE ST, Lucknow (supra) that extended period of five years cannot be invoked in the case of audit objection. The Hon ble Supreme Court in the case of Uniworth Textiles Ltd. Vs. CCE, Raipur (supra) has held thus:- 12 . We have heard both sides, Mr. R.P. Bhatt, learned senior counsel, appearing on behalf of the appellant, and Mr. Mukul Gupta, learned senior counsel appearing on behalf of the Revenue. We are not convinced by the reasoning of the Tribunal. The conclusion that mere non-payment of duties is equivalent to collusion or willful misstatement or suppression of facts is, in our opinion, untenable. If that were to be true, we fail to understand which form of non-payment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or willful misstatement or suppression of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or willful misstatement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limitation. [Emphasis supplied] . 19 . Thus, Section 28 of the Act clearly contemplates two situations, viz. inadvertent non-payment and deliberate default. The former is canvassed in the main body of Section 28 of the Act and is met with a limitation period of six months, whereas the latter, finds abode in the proviso to the section and faces a limitation period of five years. For the operation of the proviso, the intention to deliberately default is a mandatory prerequisite. 20 . This Court in Aban Loyd Chiles Offshore Limited and Ors. v. Commissioner of Customs, Maharashtra - (2006) 6 SCC 482 = 2006 (200) E.L.T. 370 (S.C.) observed :- The proviso to Section 28(1) can be invoked where the payment of duty has escaped by reason of collusion or any willful misstatement or suppression of facts. So far as misstatement or suppression of facts are conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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