TMI Blog2009 (1) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 [2004 (166) E.L.T. 207 (Tri.-Del.)], passed by the Custom, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi (for brevity, 'the Tribunal'). On 20-7-2006, the Division Bench admitted the appeal to consider the following substantial questions of law :- "(1) Whether in the facts and circumstances of the case, the Tribunal was right in accepting the plea of the assessee that provision of Section 11-A for extended period of limitation was not rightly invoked? (2) Whether in cases where extended period of 5 years is not invokable under the proviso of Section 11-A of the Central Excise Act, 1944, demand even for normal period of limitation is not valid?" 2. Brief facts of the case are that the dealer-respondent was engaged in the manufacture of PCC Websole Panels and crushed aggregate stones (Buzri) classifiable under sub-heading 68.07 and sub-heading 2505.90 of the Central Excise Tariff Act, 1985 (for brevity, 'the Tariff Act'). The work places of the respondent for manufacture of Websole Panels were situated at Village Sherpur (Ludhiana), Chheheru (Phagwara), by use of fabricated steel moulds, whereas the crushed stones were manufactured in village Chandpur, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent appeal. 6. The relevant part of the order passed by the Tribunal reads thus : "........But the question remains as to whether there was suppression of facts on the part of the appellants with an intent to evade payment of duty. It has been held by the Supreme Court in Cosmic Dye Chemical v. C.C.E., Bombay, 1995 (75) E.L.T. 721 (S.C.) that it is "not correct to say that there can be suppression or misstatement of fact which is not wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11A. Mis-statement or suppression of fact must be wilful."The Supreme Court Considered the aspect of invocability of Proviso to Section 11A in similar facts in the case of Jaiprakash Industries Ltd., 2002 (146) E.L.T. 481 (S.C.) wherein also the appellants were engaged in construction activities and as part of their business they crushed boulders into "bajri" which is then used in the construction work. They did not consider the activities of crushing boulders into bajri to be a manufacturing activity. They, therefore, did not apply for any licence nor paid excise duty. The Supreme Court has held as under : "In this case, there was a divergent view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder], a Central Excise Officer may, within 2[six months] from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, 3[as if 4|***|| for the words 5["six months"], the words "five years" were substituted:" 8. The aforesaid provision was subject matter of consideration by Hon'ble the Supreme Court in the case of C.C.E. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9) 4 SCC 275. In Padmini Products the expression 'suppression of facts' was interpreted to mean that it is not "failure to disclose the legal consequence of a certain provision" which would amount to suppression of facts. These principles have been applied and reliance has been placed on the judgment in Padmini Product's case and also on the latest judgment of Hon'ble the Supreme Court in the case of C.C.E. v. Karnataka Agro Chemicals - 2008 (227) E.L.T. 12 (S.C.) = (2008) 7 SCC 343. 10. It has come on record as a fact that that there was divergence of opinion amongst various High Courts whether crushing of bigger stones or boulders into smaller pieces amounts to manufacture. Accordingly, there was bona fide doubt as to whether or not such an activity could attract the payment of duty and the dealer-respondent did not apply for licence. Once the aforesaid factual position is clear then the judgment of Hon'ble the Supreme Court in Jaiprakash Industries Ltd. (supra) would fully apply to the case in hand. The view of Hon'ble the Supreme Court as correctly quoted by the Tribunal reads thus:- "In this case, there was a divergent view of the various High Courts whether crushing of bi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
