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TMI Blog2024 (12) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of duty taking ex-C depot price. The appellant vide their letter dated 18.11.2009, 04.04.2010, 12.08.2011, 05.09.2011, 23.12.2011 and 20.01.2012 have submitted all the relevant information of the prices on which goods were cleared at the factory gate as well as the ex- C F depot price. The show cause notice dated 16.04.2013 has been issued demanding short payment of Central Excise Duty for Financial year 2008-09 to December 2012. Extended period of limitation - HELD THAT:- For invoking extended time proviso under section 11A(4), the elements of fraud, collusion, willfull mis-statement, suppression of facts or contravention of any provisions of this act or rules with an intention to evade payment of Central Excise Duty need to be presented. The facts of the matter clearly speak that the appellant on their own informed the department since 18.11.2009 giving all the details of ex-factory prices as well as ex-C F depot prices. In such circumstances it is wrong on the part of the department to invoke the extended time proviso under section 11A(4) of the Central Excise Act, 1944 - the impugned show cause notice and the orders issued confirming the show cause notices are legally not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice dated 16.04.2013 demanding Central Excise Duty amounting to Rs. 9,42,727/- under section 11A (4) of the Central Excise Act, 1994 by invoking extended time proviso and penal provision under section 11AC as well as interest under section 11AB has also been invoked. Shri A N Kashid, Assistant General Manger has also been show caused of penalty under Rule 26 of the Central Excise Rules, 2002. The matter has got adjudicated vide impugned order-in-original dated 20.05.2014 where under Central Excise Duty amounting into Rs. 9,42,727/- has been confirmed by invoking the extended time proviso of the Central Excise Act, 1994 under section 11A(4) of Central Excise Act, 1944 and an equal amount of penalty has also been imposed under Section 11AC of Central Excise Act, 1944. A personal penalty of Rs. 95,000/- has been imposed of Shri A N Kashid, Assistant General Manager of the appellant firm under Rule 26 of Central Excise Rules, 2002. Appellant have approached Commissioner (Appeals) however, they did not succeed their also and the learned Commissioner (Appeals) vide his order dated 15.11.2017 has endorsed the findings of the impugned order-in-original dated 13.05.2014. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a matter of record that they have adjusted the duty payments considering sale price on which Central Excise duty have been discharged at the factory gate and the sale price on which the goods have actually been cleared ex-C F depot. There have been differences both on positive and negative sides, the appellant have paid excess Central Excise Duty on certain goods that is where the price at factory gate has been taken at higher side than the prices on which the goods ex-C F depot have been cleared and that amount has been adjusted by them towards the short payment of duty taking ex-C depot price. The appellant vide their letter dated 18.11.2009, 04.04.2010, 12.08.2011, 05.09.2011, 23.12.2011 and 20.01.2012 have submitted all the relevant information of the prices on which goods were cleared at the factory gate as well as the ex- C F depot price. The show cause notice dated 16.04.2013 has been issued demanding short payment of Central Excise Duty for Financial year 2008-09 to December 2012. We are of the view that for invoking extended time proviso under section 11A(4), the elements of fraud, collusion, willfull mis-statement, suppression of facts or contravention of any provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valdate certain action taken under section 11A of the Central Excise Act with retrospective effect from 17th November 1950, so as to prescribe that the notices issued under the said section for non-recovery or short-recovery or erroneous refind of duties for a period of six months or five years in certain situations will prevail notwithstanding any approval acceptance or assessment of duly under the provisions of the Central Excite Rules 14. If we read the statement of Objects and Reasons for such amendment, it is again abundantly clear that the amendment was to be made with retrospective effect from 17th November 1980 so as to prescribe that the notices issued under the said section for non-recovery or short-recovery or erroneous refund of duties for a period of 6 months or 5 years in certain situations will prevail notwithstanding any approval under the provisions of the Central Excise Rules. As noted herein earlier, the amendment with respect to change in limitation period from six months to one year was made effective only from 12-5-2000. 15. As discussed herein earlier, the changes made by the Legislature through the amendment in Section 11A of the Act was to confer power on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rules and Section 11A of the Act prior to the 2000 amendment. After the amendment in Section 11A in 2000, it can be said that the approval of the classification list supplied by the assessee cannot take away the conferment of right on the Central Excise Officer to initiate a proceeding for recovery of duties not-levied or paid or short-levied or shortpaid or erroneously refunded within six months or one year or five years, as the case may be, from the relevant date. 17. In Cotspun Ltd. (supra), we also find that this Court held that when the classification list had been approved by the Department, it remained valid and correct until its approval was challenged. If differential duty had to be recovered upon such successful challenge to classification by the Department, the demand would be prospective from the date of show cause notice. It is further evident from Cotspun Ltd 's case (supra) that there was no retrospectivity to the revision of classification list By the time, this landmark decision was rendered by this Court, the classification list system had changed to classification declaration system where approval was no longer required Subsequently, in the Finance Act, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or of the Rules made thereunder, as the case may be, to evade payment of duty by such person, the Central Excise Officer would be entitled to invoke proviso to Section 11A of the Act, that is to say, extended period of limitation can be taken advantage of by him 20. As noted herein earlier, from the facts of the present case, we find that the only question that arose before the CEGAT or the Commissioner was whether there was any suppression of facts for which the authorities were entitled to invoke proviso to Section 11A of the Act. 21. As noted herein earlier, the Commissioner while adjudicating the show cause notice confirmed the duty demand on goods found short and also imposed a penalty of Rs. 10,000/- on the assessee but he dropped the rest of the proceedings on the ground that there was no suppression of facts on the part of the appellant herein and accordingly extended period of limitation was found by him not to be available to the department under the proviso to Section 11A of the Act In appeal, CEGAT, however, as noted herein earlier, reversed this finding of the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he products in question was approved by them. 24. Furthermore, it is also evident from the record that the flow-chart of manufacturing process which was submitted to the Superintendent of Central Excise, Rampur on 17-5-1990 clearly mentioned the fact of post- forming process on the rubber [See page 15 of the Order of CEGAT] The CEGAT in its order has also recognized the fact of collection of some relevant samples by the Excise authorities on 25-9-1985 and 22-1-1988. [See Paragraphs 7.1 Page 14 of the Order of CEGAT) 25. In this view of the matter, we are unable to persuade ourselves to agree with the finding of the CEGAT as admittedly, the products of the appellant were inspected from time to time and the department was aware of the manufacturing process of the products although the appellant might not have disclosed the post-forming process in detail. 26. In Tata Iron Steel Co. Ltd. v Union of India Ors [1988 (35) ELT 605 (SC)] this Court held that when the classification list continued to have been approved regularly by the department, it could not be said that the manufacturer was guilty of suppression of facts As noted herein earlier we have also concluded that the classificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Excise Officer to proceed to recover duties in the manner indicated in proviso to Section 11A 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 the CEGAT to come to a conclusion that the appellant was guilty of suppression of facts . In Densons Pultretaknik v. Collector of Central Excise [2003 (11) SCC 390], this Court held that mere classification under a different sub-heading by the manufacturer cannot be said to be willful mis-statement or suppression of facts. This view was also reiterated by this Court in Collector of Central Excise, Baroda v LMP Precision Engg. Co. Ltd. [2004 (9) SCC 703]. 28. However, in the case of LMP Precision Engg. Co. Ltd (supra), this Court came to the conclusion that the manufacturer was guilty of suppression of facts in that decision, manufacturer did not make any attempt to describe the products while seeking an approval of classification list and in that background of facts, it was held that it amounted to suppression of facts and therefore, Excise authorities were entitled to invoke proviso to Section 11A of the Act. It also appears from that dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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