2015 (1) TMI 679 - AT - Central Excise

Extended period of limitation - Suppression of facts - appellant was all along under bonafide belief that due to dispute of M/s. Roha Dychem before various forums ‘food colour preparation’ shall fall under Chapter 21 while Revenue was claiming classification under Chapter 32 of Central Excise Tariff Act, 1985 - Mis declaration of goods - Penalty u/s 11AC - Malafide intention - Bar of limitation - Held that:- Revenue relied on the circular dated 23-5-1997 and dated 19-12-1997. The circular dated 6-1-1998 is the one on which appellant places reliance. Undisputedly, CEGAT in Continental Foundation Joint Venture case (2007 (8) TMI 11 - SUPREME COURT OF INDIA) was held to be not correct in a subsequent larger Bench judgment. It is, therefore, clear that there was scope for entertaining doubt about the view to be taken. The Tribunal apparently has not considered these aspects correctly. Contrary to the factual position, the CEGAT has held that no plea was taken about there being no intention to evade payment of duty as the same was to be reimbursed by the buyer. In fact such a plea was clearly taken. The factual scenario clearly goes to show that there was scope for entertaining doubt, and taking a particular stand which rules out application of Section 11A of the Act.

As far as fraud and collusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word ‘wilful’, preceding the words ‘mis-statement or suppression of facts’ which means with intent to evade duty. The next set of words ‘contravention of any of the provisions of this Act or Rules’ are again qualified by the immediately following words ‘with intent to evade payment of duty.’ Therefore, there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful. - there was no malafide in the show-cause notice and confusion of classification persisted in the industry having led the appellant to be in confusion, the adjudication can be said to be time-barred - Decided in favour of assessee.