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TMI Blog2000 (4) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... had been proved beyond doubt that they had manufactured plant and machinery/testing equipments worth Rs. 31.26 lacs; that the facts disclosed in the balance sheet had to be accepted as true unless otherwise proved; that Note 6 of Schedule 'Q' confirm the position that equipments were manufactured and used captively within the factory premises. On appeal, Collector (Appeals) under the impugned order rejected their appeal. 3.Shri R. Santhanam, learned Advocate, submitted that the Appellants manufacture Electric Transformer, Semiconductor devices and other Electrical and Electronic equipments; that they have their own research and development wing in which trial and experiments are undertaken for the developmental jobs based on latest technology; that during the course of such trial and experiments bought out parts and components are assembled and after the research the same are disassembled; that such research and development process undertaken by them cannot be called manufacturing process by any stretch of imagination; that they had attempted to manufacture testing equipment in which they did not succeed and the testing equipment did not reach the stage of finished goods; that ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the statement of Shri E. George, Commercial Manager was recorded on 23-12-1991; that nowhere Shri George had deposed that the impugned goods were finished goods; that they were under the bona fide belief that on such research and development work, no Central Excise duty is payable; that there was no mala fide intention on their part which is evident from the fact that they had mentioned about these impugned goods in the balance sheet. Learned Advocate also relied upon the decision in the case of Rishabh Refractories Pvt. Ltd. v. C.C.E., Chandigarh, 1996 (87) E.L.T. 93 (T), wherein it was held that declaration of inflated figures of sales before the Department of Industry with supporting affidavit in order to obtain higher quota of coal is not sufficient to establish clandestine removal of excisable goods for demanding duty. 4.Countering the arguments, Shri M.P. Singh, learned DR submitted that the demand of Central Excise duty in the present matter has been made on the basis of statement made by the Appellants in their balance sheet to the effect that addition to plant and machinery worth Rs. 31.26 lakhs had been made in the company by capitalisation of the expenditure on raw m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein it was held that duty has to be paid on plastic strips manufactured at the intermediate stage of production of plastic fabric in terms of Rules 9 49. Learned DR also contended that the extended period of limitation is invokable as the Appellants had neither taken any licence for manufacture of the impugned goods, nor filed classification list or price-list as required under the law; that even for research and development purpose, if excisable goods are manufactured a licence has to be taken; that the fact of manufacture and removal of the goods was never intimated to the Department. The contention of the Appellants that they were undertaking trial and experiment and the goods were not manufactured is nothing but an after thought; that plea of reasonable belief is without any foundation as they had not even intimated about the manufacture of the excisable goods to the department. He also emphasised that as against their statement in the balance sheet and the annual report no evidence has been brought on record in support of their submissions that the goods were not complete. Finally, the learned DR submitted that instructions dated 14-5-1992 is administrative instructions w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heet that the Appellants had fabricated plant and machinery including testing equipment worth Rs. 31.26 lakhs and no record of such fabrication was kept by them nor any duty on their use was paid by them. There is no force in the submissions of the Appellants that such mention was made in the balance sheet to present a rosy picture of the company to the share holders or the equipment did not reach the finished stage and they were destroyed from the fact that Note on balance sheet, profit and loss account specifically mentions about the fabrication and capitalisation and belies the submissions made by the Appellants. The Collector (Appeals) in the impugned order has rightly given his findings that the balance sheet is a very important documents for a company and each of the figure and statements incorporated therein is open to criticism and analysis. A limited company has to lay a balance sheet and profit and loss account at every general meeting of the company as provided under Section 210 of the Company's Act which provides that every balance sheet of company shall give true and fair view of the state of affairs of the company. Section 215 of the Companies Act also provides that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is apparent that the facts were suppressed from the Department and the extended period of limitation is rightly invokable. Whatever correspondence has been exchanged between the department and the Appellants is after the manufacture and use of the goods in question and in view of the decision of the Larger Bench in Nizam Sugar Factory v. CCE, Hyderabad - 1999 (114) E.L.T. 429 (Tribunal) = 1999 (34) RLT 864, acquiring the knowledge by the Department subsequently does not take away the period of 5 years provided by the law maker itself. We also do not find any substance in the contention of the learned Advocate that a show cause notice for demanding duty cannot be issued on the basis of audit objection. The observation of the Appellate Tribunal in the case of Swastic Tin Works, supra, relied upon by ld. Advocate was with reference to the facts that the show cause notice was issued for demanding the duty in respect of the products without any investigation which were declared by the Assessee and cleared as such for years together and were approved as non-excisable in consecutive classification list. In view of these facts the Tribunal observed that there is no claim that there has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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