TMI Blog2012 (11) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... ty under Notification No. 6/2006-CE dated 1.3.2006 (Sl. No. 31) was very much disclosed by the assessee to the department as early as in June 2006 and this fact was clearly acknowledged by their Range officer in his letter dated 27.10.2006. The relevant monthly returns also described the goods as power cords in the relevant column. There was no justification for the department to allege in the show-cause notice dated 5.2.2010 that the appellant had suppressed that fact with intent to evade payment of duty. In other words, the extended period of limitation was not reasonably or justifiably invoked in this case. The plea of limitation succeeds, and so is the plea against the penalty imposed under Section 11AC of the Act - Demand of duty is set aside on the ground of limitation and penalty imposed under Section 11AC of the Central Excise Act is also set aside - appeal is allowed. - CEA No. 662 of 2011 - Final Order No. 708/2012 - Dated:- 13-11-2012 - MR. P.G. CHACKO, J. Appearance: Mr. B. Seshagiri Rao, Advocate for appellant Mr. A. K. Nigam, Additional Commissioner (AR) for respondent This appeal filed by the assessee is directed mainly against the demand of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r customers on payment of duty at appropriate rate without claiming the benefit of the above notification inasmuch as the aforesaid condition was not met in that case. The resultant situation was that the appellant, during the aforesaid period, cleared Power Cords to M/s XL Telecom Ltd. without payment of duty and to other customers on payment of duty. On scrutiny of their records, the jurisdictional Superintendent of Central Excise found that separate accounts were not maintained in respect of inputs used in the manufacture of dutiable and exempted goods. On this basis, the Superintendent raised a demand in terms of Rule 6(3)(b) of the CENVAT Credit Rules, 2004 requiring the appellant to pay 10% of the total price (excluding taxes) of the goods cleared to M/s XL Telecom Ltd. during the aforesaid period. This demand was raised in a letter dated 27.10.2006 and the same was honoured by the party by paying Rs. 2,79,564/- in terms of Rule 6(3)(b) ibid with interest thereon amounting to Rs. 18,545/-. Later on, the jurisdictional Assistant Commissioner issued show-cause notice dated 5.2.2010 demanding duty of Rs. 4,56,248/- in respect of the Power Cords cleared to M/s XL Telecom Ltd. fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted only partial relief to the assessee by setting aside the penalty imposed on them by the lower authority under Rule 27. The demand of duty and interest thereon and the other penalty imposed by the original authority came to be upheld. 5. Heard both sides. The learned counsel for the appellant has drawn my attention to certain documents in the context of setting up a challenge against the invocation of extended period of limitation as also against the imposition of penalty under Section 11AC. Copies of the ER-1 Returns filed for the period from June to October 2006 are amongst these documents. Each of these returns indicates clearance of Power Cords at nil rate of duty as also clearance at 16% duty. In respect of the latter category, the tariff entry indicated in the return is CSH No. 8544 19 90 and, in respect of the former, Annexure-45 is mentioned in the column for tariff entry. Notification No. 6/2006-CE and Sl. No. 31 thereof have also been indicated in the appropriate column in respect of the goods cleared at nil rate of duty. A copy of Annexure-45 [application under Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by the appellant and that such information was clearly disclosed to the department. In this connection, he refers to the Superintendent s letter dated 27.10.2006 addressed to the appellant, wherein the fact that they had cleared power cords at nil rate of duty on the basis of Annexure-45 /application of M/s XL Telecom Ltd was acknowledged by the Range officer. It is submitted that Annexure-45 read with Sl. No. 31 of Notification No. 6/2006-CE clearly disclosed the classification of power cords which were cleared by the appellant to M/s XL Telecom Ltd. This information was available to the department as early as in June 2006. In this connection, reference is made to the appellant s letter to the Range Officer, dated 9.6.2006, whereunder a copy of Annexure-45/ application of M/s XL Telecom Ltd. was furnished to the Range officer. Even though the material facts were disclosed to the department by the appellant in June 2006, the show-cause notice alleging suppression of such facts came to be issued as late as on 5.2.2010. On these facts, the learned counsel submits that the proviso to Section 11A(1) of the Act was wrongly invoked in this case. On the same reasoning, it is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment as early as in June 2006 and this fact was clearly acknowledged by their Range officer in his letter dated 27.10.2006. The relevant monthly returns also described the goods as power cords in the relevant column. Against this description, the assessee specified Annexure-45 and also mentioned Notification No. 6/2006-CE dated 1.3.2006 and Sl. No. 31 thereof. If all these documents are read together, it is not difficult to find that the material fact was very much known to the department from June 2006. There was no justification for the department to allege in the show-cause notice dated 5.2.2010 that the appellant had suppressed that fact with intent to evade payment of duty. In other words, the extended period of limitation was not reasonably or justifiably invoked in this case. The plea of limitation succeeds, and so is the plea against the penalty imposed under Section 11AC of the Act. 9. Needless to say that the appellant can legitimately claim support from some of the decisions cited by them. 10. In the result, it is ordered as under: (a) The demand of duty is set aside on the ground of limitation. (b) The penalty imposed under Section 11AC of the Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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