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2013 (6) TMI 142 - PATNA HIGH COURTExtended period of limitation - mens rea - classification of handpump - held that:- in absence of any deceitful practice by the assessee if there is short levy/payment of duty then, within the short-period of six months (now one year), duty could be ordered to be recovered with interest under Section 11AA. There would be no liability to penalty or penal interest. Department is unable to establish any deliberate act on part of the petitioner-assessee to evade tax. All it could establish was that a claim after full disclosure was made, which was later, after the period of limitation found unsustainable and, as such, all penal actions taken. That is not correct and could not have been done. The duty demand sustained by the Tribunal is, thus, not correct and that part of the order cannot be sustained. Even the adjudicatory authority, on remand, was unable to point as to what was the specific information suppressed and how it was connected with the tax sought to be evaded. Mere misstatement in some form or the other, not relevant with full disclosure of relevant facts in other forms, cannot by itself lead to finding of deliberate attempt to evade tax. At best, what can be said is that the claim of assessee was misconceived which resulted in short-payment of duty. This would be actionable within the shorter period of limitation available under Section 11A(1) and not relevant for the longer period under proviso thereto. In fact, even the Tribunal held it to be a technical breach involving no mens rea when it came to penalty. We fail to see if that were so in respect of penalty, how the demand could be sustained within the longer period of limitation in absence of mens rea. The order of the Tribunal, in so far as it sustains the duty demand with reference to the longer period available under the proviso to Section 11A(1) is unsustainable - decided in favor of assessee.
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