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TMI Blog2023 (7) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation under the abovementioned proviso had been invoked, held that since the expression suppression of facts is used in the company of terms such as fraud, collusion and willful misstatement, it cannot therefore refer to an act of mere omission, and must be interpreted as referring to a deliberate act of non-disclosure aimed at evading duty, that is to say, an element of intentional action must be present. The format of the ER-1/RT-12 return is seen, which the assessee was required to file on a monthly basis for intimating to the department the value of clearances effected and the amounts of duties paid thereon - there are no separate column or requirement in these forms for declaring the value and other details of clearances effected to the deemed export buyers i.e. holders of advance licenses. Note 4 under Form ER-1 does require separate details to be mentioned for exports under bond - In the absence of any specific column or note similar to note 4, requiring separate disclosure of the value of deemed export clearances, there are no merit in the findings of the adjudicating authority that there was suppression of facts as a consequence of assessee's failure to separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sake of convenience, we are first taking up the facts of Civil Appeal No. 6033/2009. The order impugned in this appeal is that of Customs, Excise Service Tax Appellate Tribunal (CESTAT or Tribunal) dated 17.3.2009 which had, by a majority of 2:1, allowed an appeal filed by the Respondent-Assessee against an order of the Commissioner of Central Excise, Rajkot by which a demand for differential duty was confirmed against the assessee by invoking the extended period of limitation available under the proviso to Section 11A (1) of the Central Excise Act, 1944. 3. The demand for differential duty of excise was raised on the allegation that the assessee had incorrectly determined the assessable value of its finished goods by not including therein the monetary value of the duty benefits that it had obtained from its customers as a result of the transfer of the advance licenses. 4. This demand for differential duty was raised for clearances made during the period of September 2000 to March 2004. The Show Cause Notice which was issued on 28.9.2005 relied upon a judgment of this Court on 9.8.2005 in the case of IFGL Refractories Ltd in support of the plea that monetary value of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d supra. This decision of the Hon'ble Supreme Court has reversed the decision of the Tribunal in the case of M/s IFGL Refractories Ltd. [2001 (134) ELT 230]. In other words, the Tribunal has taken a view that discounts offered to advance licence holders were not additional consideration which decision has been reversed by the Hon'ble Supreme Court. Under these circumstances, the claim that the appellant was having a bonafide belief that the additional discounts are permissible has to be accepted and demand of duty has to be confined to duty within the normal period of limitation. No penalty will be justified. 10. The corresponding finding of the Member (Judicial) on the issue of limitation were as under: The orders proposed by learned Member (Technical) allowed Appeal No. E/228/07, on point of limitation, by setting aside the confirmation of demand and penalty imposed upon the appellant. I agree with the said order passed by learned Member (Technical) in the said appeal. ANALYSIS 11. We have heard the contentions of both the parties in great detail. 12. Section 11A of the Central Excise Act, 1944, which deals with the issue of limitation for issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... har Drugs and Liniments, Hyderabad 1989 (2) SCC 127 , this Court, while dealing with a similar situation of invocation of extended period of limitation under Section 11(A) of the Act, this Court held as under: In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or willful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or willful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided the basis for the assesse to believe that its method and approach of determining the assessable value was in accordance with law. The Ld. Counsel further pointed out that there was otherwise no justification for alleging suppression of facts in the present case as the assessee had submitted to the Revenue authorities copies of their pricing policy from time to time. Our attention was invited to para 2 of the Show Cause Notice dated 28.9.2005 wherein this fact has been recorded in the notice. 18. The Ld. Counsel for the revenue on the other hand submitted that the Tribunal had failed to apply its mind to the allegations and specific finding of the adjudicating authority. It was submitted that the adjudicating authority had specifically found that the subject transactions where additional discounts had been offered to certain customers who had agreed to transfer to the assessee duty benefits flowing from advance licence held by them were wrongly clubbed with domestic clearances with a view to mislead range officer tasked with the responsibility of checking the transactions. The Ld. Counsel for the Revenue accordingly submitted that the assesse was guilty of suppressing materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he adjudicating authority that there was suppression of facts as a consequence of assessee's failure to separately disclose the value of deemed export clearances. An accusation of non-disclosure can only be made if there is in the first instance a requirement to disclose. 21. We also find that Note 4 to Form ER-1 requires separate details of clearances to be mentioned for exports under Bond. There is no reference in the said notes to deemed exports or supplies made to holders of advance licenses. We therefore agree with the submissions of the counsel for the assessee that the assesse was never required to separately furnish details of clearances made to holders of advance licenses. We also find that neither the show cause notice nor the civil appeal filed by the Revenue before this Court contain any reference to the wrongful clubbing of deemed export clearances under the details meant for domestic clearances. Also the order of the Tribunal does not contain any reference to this particular aspect which was the main thrust of the oral arguments made by the Ld. Counsel for the Revenue before this Court. In our considered view, the Revenue cannot be permitted to argue its matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief. 23. We are in full agreement with the finding of the Tribunal that during the period in dispute it was holding a bonafide belief that it was correctly discharging its duty liability. The mere fact that the belief was ultimately found to be wrong by the judgment of this Court does not render such belief of the assessee a malafide belief particularly when such a belief was emanating from the view taken by a division bench of Tribunal. We note that the issue of valuation involved in this particular matter is indeed one were two plausible views could co-exist. In such cases of cases of disputes of interpretation of legal provisions, it would be totally unjustified to invoke the extended period of limitation by considering the assessee's view to be lacking bonafides. In any scheme of self-assessment it becomes the responsibility of the assessee to determine his liability of duty correctly. This determination is required to be made on the basis of his own judgment and in a bonafide manner. 24. The extent of disclosure that an assessee makes is also linked to his belief as to the requirements of law. In the present case the assessee who was required to self-assess his liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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