9911796707
TMI Blog2024 (8) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... ue. A lack of reasoning in an order makes it difficult for Appelate Authorities to discharge their appellate function properly. Extended period of limitation - HELD THAT:- It is not merely a blame worthy act that would trigger the evocation of the extended period of limitation, something more is required. The act should have been done with the intention to evade payment of duty. There is a positive finding of intended duty evasion has not been arrived at in the impugned order. Hence the demand of duty for the extended period must fail. Interest - HELD THAT:- The appellant is liable to pay duty for the normal period. Further whenever the payment of interest is mandated by statute, it automatically comes into play, when the happening or non-happening of an event mentioned in the relevant section of the statute occurs. The liability gets extinguished only when the statutory payments are made as required by the statute. A similar issue relating to payment of interest under the Central Excise Act was examined by the Hon ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS M/S SKF INDIA LTD. [ 2009 (7) TMI 6 - SUPREME COURT] wherein it was held that interest was payable even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the goods supplied to the Indian Railways under chapter 84/85/86, etc. for which the Excise Duty rate was mostly 12.5%. In February 2014 Excise duty rates for items under other respective tariff headings such as Chapter 84, 85 was reduced to 10% vide Notification No. 4/2014 - Central Excise (Tariff) dated 17/02/2014. However, post 2014, the Appellant re-classified the goods under the bonafide belief that all the goods that are supplied for use to Indian Railways merited classification under CTH 8607 as per the industry practice. The goods were chargeable to Excise Duty at the higher rate of 12.50%, though the duty applicable for Chapter 84/85 goods was reduced to 10%. During the period from 01/03/2016 to 30/06/2017, Notification No. 12/2016 Central Excise was issued to provide concessional rate of duty (Viz. 6%) for goods falling under 8607 and the Appellant claimed this benefit. The appellant had duly and regularly filed all the periodical Excise Returns for the impugned period. The decision to re-classify the goods under tariff heading 8607 in 2014 from Chapter 84 / 85 was taken well before the reduction/ concessional rate benefit given in 2016. The same classification was cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne taking into account all facts, details of individual items, admitted classification by Appellant, recorded statement having evidentiary value, all the decisions on the subject, to arrive at the appropriate classification. As regards the issue of misclassification and wrong availment of CENVAT in respect of Kittings and Platform Doors i.e. goods procured and cleared as such, he discussed the relevant paras from the impugned order. As regards suppression of facts by the appellant he stated that the awareness about the classification is a matter of fact. It s also a fact that same were not communicated/ disclosed to the department and the appellant had not approached the department for Advance Ruling or for advice on the said Classification matter. By citing ignorance and suggesting that a Tendering Authority such as Railways should have sought Advanced Ruling, the Assessee cannot get away from the fact that they resorted to suppression of facts, mis-stated facts in their ER returns and failed to pay duty correctly. There is no legal bar in terms of provisions of any rule or any Circular that a Corrigendum should not enhance the duty. Moreover, in the instant case, the same has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of pantographs and its parts from CTH 8607 in the SCN to CTH 8535, the department has sought to impose an additional duty demand of INR 46,70,340. In the instant case, the classification of pantographs and its parts were already alleged in the SCN, to fall under chapter 86 and hence a different position cannot be adopted by issuing a corrigendum. The corrigendum has traversed beyond the SCN and is bad in law. 9. Normally the word corrigendum is used when correction is made in a printed matter which has already been disclosed to the public. The Hon ble Allahabad High Court in its judgment in Polyplex Corpn. Ltd. Thru' Auth. Signatory Vs Union Of India Others [2014(306) ELT / 2014:AHC:62320], while examining the effect of a corrigendum held; 8. Normally the word corrigendum is used when correction is made in a printed matter which has already disclosed to public and, therefore, mere handwritten correction or draft or finalized matter would not be sufficient but correction as such has to be notified separately and that is how it is termed corrigendum. 9. The meaning of corrigendum is an error to be corrected especially an error in print . The word corrigenda is used in a list o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction XVII of the Central Excise Tariff, 1985. They hence merit classification under heading 8607 as parts of railways or tramway locomotives or rolling stock, notwithstanding their mention under any other chapter of the Customs Tariff. The appellant has drawn attention to the decision of a Coordinate Bench of this Tribunal in the case of Hi-Tech Industries Ltd Vs Commissioner of Customs, Bangalore [2005 180 ELT 0356], wherein web camera was classified under chapter 84 instead of chapter 90 considering that it was not an ordinary camera and does not function independently. The decision of the Tribunal has been affirmed by the Hon ble Supreme Court in Commissioner Vs Hi-Tech Computers [2015 321 ELT A274 SC]. 11. The discussion on pantographs and its parts occurs at para 26 of the impugned order and is very cryptic. It accepts that pantograph and its parts are exclusively used in railways or tramway locomotives, however it states that the classification of any item under the Central Excise Tariff is not guided by usage or application of the goods but guided by the notes prescribed under Section / Chapters of the Schedule to the Central Excise Tariff, 1985. The relevant para is reprod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular law ceases, so does the law itself. Since the revenue has not been able to discharge their burden of proof through a speaking order on the merits of the issue, the classification of pantographs and its parts as revised and declared by the appellant cannot be disturbed. 13. Having decided the issues regarding the classification of the impugned goods and corrigendum to the SCN we shall now examine the question of time bar. 14. The appellant avers that both the impugned SCN and the impugned Order nowhere states as to how the mens rea of the Appellant is proven beyond doubt. No reasons or evidence was provided by revenue to substantiate the claim of intention to evade payment of tax. They had re-classified the goods falling under Chapter 84/85 under the bonafide belief that all the goods that are supplied for use in Indian Railways merits classification under CTH 8607 which were chargeable to Excise Duty at the higher rate of 12.50%, though the duty applicable for Chapter 84/85 goods was reduced to 10%. The said position was changed to align with the industry practice. During the period from 17/02/2014 to 29/02/2016 the Appellant reclassified goods under Chapter 8607 wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odical returns is prescribed. It is the legal responsibility of the appellant to discharge the duty liability as per the provisions of the Act, and also declare the same through the prescribed periodical returns. The appellant has willfully misstated the classification of goods in ER-1 returns filed with the Department and they have also suppressed vital information of nature of goods from Department with an intent to evade duty. In the instant case, it was only after specific intelligence gathered and subsequent investigations carried out by the DGGI Hosur Regional Unit that the fact of short payment of Central Excise duty and contraventions of the provisions of the Act and Rules came to light, thereby enabling invocation of extended period under Section 11A (4) (e) of the Central Excise Act, 1944. Further, they are liable to pay interest, at applicable rates, as prescribed under Section 11AA and penalty under Section 11AC Ibid. 18. Prima facie, we find that the allegations in the SCN do not disclose any willful attempt to evade payment of duty. The appellant had reclassified the goods under Tariff Heading 8607 during 2014 when the duty rate was @12.5% and well before the concessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded similar to Section 11A of the Central Excise Act, 1944. Relevant portion is extracted below; 16. Another ground for invoking extended period of limitation given in the impugned order is that the appellant was operating under self-assessment and hence had an obligation to assess service tax correctly and take only eligible CENVAT credit and if it does not do so, it amounts to suppression of facts with an intent to evade and violation of Act or Rules with an intent to evade. We do not find any force in this argument because every assessee operates under self-assessment and is required to self-assess and pay service tax and file returns. If some tax escapes assessment, section 73 provides for a SCN to be issued within the normal period of limitation. This provision will be rendered otiose if alleged incorrect self-assessment itself is held to establish wilful suppression with an intent to evade. To invoke extended period of limitation, one of the five necessary elements must be established and their existence cannot be presumed simply because the assessee is operating under self-assessment. 17. The argument that the appellant had not disclosed in its returns that it was availing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the intention to evade payment of duty. We find that a positive finding of intended duty evasion has not been arrived at in the impugned order. Hence the demand of duty for the extended period must fail. 20. On the payment of interest, the appellant has stated that when duty demand is in itself not sustainable, there can be no question of payment of any interest by the appellant under Section 11AA of the Central Excise Act. We have found that the appellant is liable to pay duty for the normal period. Further whenever the payment of interest is mandated by statute, it automatically comes into play, when the happening or non-happening of an event mentioned in the relevant section of the statute occurs. The liability gets extinguished only when the statutory payments are made as required by the statute. A similar issue relating to payment of interest under the Central Excise Act was examined by the Hon ble Supreme Court in Commissioner of Central Excise, Pune Vs M/s SKF India Ltd [2009-TIOL-82-SC-CX] wherein it was held that interest was payable even in a case of short payment of duty which was indeed completely unintended and without any element of deceit etc. We thus find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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