TMI Blog2010 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... the same division and as such it cannot be reasonable to conclude that the revenue was not aware of the transactions. Since this is not what is envisaged under the proviso to Section 11A(1) of the Act, we cannot agree with the reasoning and the conclusion reached by the Tribunal. - matter remanded back to tribunal - 3860 OF 2006 - - - Dated:- 12-11-2010 - Coram: D.K. JAIN JJ. and H.L. DATTU JJ. JUDGMENT H.L. Dattu, J. 1) The appellant, being aggrieved by the order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai, (for short `Tribunal') in Appeal No.A/75-78/WZB/06/C-II/EB dated 13.01.2006, is before us in this appeal filed under Section 130-E of the Customs Act, 1962 (hereinafter referred to as `the Act'). 2) The issue in this appeal relates to the valuation of aluminum castings manufactured by M/s. Anurang Engineering Co. Ltd. (for short `Anurang') which in turn is based on the purchase price of aluminum ingots supplied by M/s. Bajaj Auto Ltd., Waluk, Aurangabad (for short `Bajaj'). Anurang, who is Respondent no. 4 in this appeal, is engaged in the manufacture of aluminium castings, commonly known as "handle bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during the period with effect from 02.06.1998 to 30.09.1999 should not be recovered under Proviso to Section 11AC(1) of the Act read with Rule 5 of the Central Excise (Valuation) Rules, 1975, why penalty under Section 11AC and interest under Section 11AB of the Act should not be levied and recovered and penalty under Rule 209A of the Central Excise Rules, 1944, should not be imposed and recovered from Respondent Nos. 1 to 3 viz. Bajaj, Sh.Ranjit Gupta, Vice President (Materials) of Bajaj and Sh. Anurag Naresh Chandra, Director of Anurang. 4) In reply to the notice, Bajaj had stated that the sale of inputs - aluminum ingots to Anurang was on the basis of fair market price mutually agreed between the parties. It also claimed that there was no provision in Central Excise Laws which imposed an obligation on a person to sell his goods at a particular price in such transactions. They also claimed that the notice and the demand therein was time-barred as it had been issued beyond the time prescribed under Section 11A of the Act (since the notice was for the period June 1998 to September 1999, and the notice date was 05.03.2001 and was served by post on 22.03.2001), and that jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the adjudicating authority. The Tribunal inter-alia adopted the following reasoning while allowing the appeal: "However, while adjudicating the matter the Commissioner, in para 16 of the order has observed that: "In this case there is no allegation that while paying duty on ingots under Rule 57F(3) M/s. Bajaj Auto Ltd. have undervalued the ingots. The payment of duty under this rule is not the subject matter, therefore, on this account the pleadings of the assessee and other notices are not relevant. This matter is regarding under valuation of final product". The above observations made by the Commissioner are in contrast to the findings arrived at by him. If the ingots have been sold at the correct value, how the value of the same can be enhanced at the manufacturers end by some hypothetical additions on various grounds. It is also on record that the statement of the Authorized Representative of M/s. Bajaj Auto Ltd. as also of M/S. Anurang Egg. Co. Ltd. are to the effect that the prices of ingots were negotiated prices. However the adjudicating authority has observed that though the prices were agreed but they were not genuine and were adopted for under valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, and that there were no contrary findings of the Commissioner in this regard. He also submits that the finding of the Tribunal that the findings and conclusions reached by the adjudicating authority is on mere assumptions and presumptions is erroneous. According to the learned counsel, the findings of the adjudicating authority was after thorough enquiry and investigation of the records of the assessee and also based on the statements of the Vice President of Bajaj and Director of Anurang during investigation. The learned counsel further points out that the extended period of limitation as provided under Section 11 A(1) of the Act would come to the aid of the Department since the respondents did not disclose the correct facts before the Department with intention to evade payment of duty under the Act. 8) Per contra, Mr. Joseph Vellapally, learned senior counsel for the respondents would contend that the assumption of adjudicating authority that Anurang in their invoices has not given true and correct declaration, is not only contradictory but also not based on any evidence whatsoever. It is further contended that on mere presumption and assumption, the adjudicating author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within one year 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, as if for the words one year, the words "five years" were substituted: Explanation. -- Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of [one year] or five years, as the case may be. (1A) When any duty of excise has not been levied or paid or has been short-levied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful mis-statement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case." 14) In the case of Cosmic Dye Chemical v. Collector of Central Excise, Bombay, (1995) 6 SCC 117, it is held: "Now so far as fraud and collusion are concerned, it is evident that the requisite intent, i.e., 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" is again qualified by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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