2010 (12) TMI 433 - HC - Customs

Demand along with penalty and interest - Limitation - Suppression - The respondent-assessee a 100% EOU debonded its imported capital goods after obtaining necessary permission from the Development Commissioner - assessee had filed the bill of entry No. OFL/Debonding/01/2003-04 calculating the Basic Customs Duty @ 5% amounting to Rs. 6, 90, 875/- on the capital goods availing exemption under Notification No. 21/2002-CUS dated 1-3-2002. - non-mentioning of the serial number under which the goods would fall - Held that it cannot be said that there was any wilful misstatement or suppression on the part of the assessee so as to invoke the extended period of limitation - The Tribunal was therefore justified in holding that the show cause notice was time-barred and that no case was made out for invoking the extended period of limitation - Thus there being no infirmity in the impugned order of the Tribunal the same does not give rise to any question of law - Hence the appeal is accordingly dismissed.

Summary

Issues:
- Challenge to order under Section 35G of the Central Excise Act, 1944
- Suppression of facts in mentioning exemption Notification No. 21/2002-CUS
- Ignoring an undertaking given by the assessee at the time of clearance of goods
- Liability to pay duty and contention of being barred by limitation
- Allegation of willful misstatement and suppression by the assessee
- Proper assessment of duty liability by the Customs Officer
- Invocation of the extended period of limitation
- Justification of the Tribunal's decision on limitation

Analysis:
1. The appellant, a Commissioner, challenged an order under Section 35G of the Central Excise Act, 1944, regarding the suppression of facts by the respondent-assessee in not mentioning specific details in an exemption notification. The Tribunal allowed the appeal on grounds of limitation, leading to the dispute over whether the Tribunal was right in its decision despite the suppression of facts by the assessee.

2. The respondent, a 100% Export Oriented Unit, faced a duty demand issue related to debonding imported capital goods. The assessee contended that the show cause notice was barred by limitation, which the Tribunal upheld, setting aside the previous order. The appellant argued that the assessee willfully suppressed facts, misleading the authorities, and invoked the extended period of limitation.

3. The Tribunal noted that the proper officer did not raise any objection regarding additional duties at the time of assessing the bill of entry, shifting the responsibility to ascertain the duty liability onto the Customs Officers. The Tribunal found no mala fide intention or suppression on the part of the assessee, leading to the conclusion that the extended period of limitation was not warranted.

4. The Court observed that the failure of the concerned officer to verify the duty liability based on the description of goods cannot be equated with suppression by the assessee. Consequently, the Tribunal's decision to dismiss the appeal on the grounds of limitation was justified, as there was no willful misstatement or suppression by the assessee to invoke the extended period of limitation.

5. Ultimately, the Court dismissed the appeal, finding no substantial question of law arising from the Tribunal's decision. The judgment upheld the Tribunal's ruling that the show cause notice was time-barred and that there was no basis for invoking the extended period of limitation, thereby concluding the legal dispute.