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1990 (12) TMI 251

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..... exchange of correspondence in regard to taking of a licence by the appellants and later on investigation revealed about existence of their other Units in which excisable goods were being manufactured show cause notice was issued vide No. 920/85 dated 30-9-1985 alleging suppression of facts in regard to Item 68 goods and duty was demanded from the appellants in terms of this show cause notice to the tune of Rs. 4,83,239.65 for the years 1983-84 and 1984-85 and further, the appellants were asked to cause why the duty @ 12% should not be demanded from them in respect of the goods falling under Item 68 cleared by them during 1-4-1985 to 30-11-1985 from their timber division and the quantum quantified for this period was not indicated and they were informed that amount of duty will be made known to them on receipt of particulars of earlier clearance called for from them and an addendum for this period was issued on 6-1-1986 indicating the demand for this period as Rs. 1,40,226.55. The learned lower authority took note of the pleas of the appellants and demanded following duties for different years under Rule 9(2) of the Central Excise Rules read with proviso to Section 11A of the C.E.S .....

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..... red under the normal course of business as also for the purpose of audit required for various Government authorities, no charge of suppression of facts could be held against the appellants. He has pleaded that the appellants were under the mistaken impression that the exemption available for Small Scale Industries Sector was upto the aggregate value of Rs. 30/- lakhs clearances as against Rs. 20/- lakhs in terms of the Notification available at the relevant time and it is for this reason that they did not take out a licence. In this connection he drew our attention to their explanation to the show cause notice that they did not take out a licence according to their understanding of the relevant Notification. He has pleaded that the appellants were registered with Small Scale Industries Directorate as a Small Scale Unit from 1976 onwards and had declared their activities with the said Directorate. He has pleaded that the appellants having come on record in regard to their activities could not be said to have indulged in conscious suppression of facts. In this connection he referred to the judgment of the Hon ble Supreme Court reported in 1989 (43) E.L.T. 195 in which the Supreme Cou .....

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..... has pleaded that the question of suppression has to be judged with reference to their compliance with the requirements of Central Excise law and procedure. He has pleaded that proviso to Section 11A authorised the Department for demanding duty for five years for reason of suppression and the provision has been correctly invoked. In this connection, he drew our attention to the narration of facts in the order-in-original and pleaded that Notification 77/83 and 77/85 under which exemption has been allowed in respect of Item 68 goods clearly laid down the limitation of aggregate value of clearance of excisable goods for the purpose of benefit of the Notification and that there could be no mis-understanding in this regard and the appellants had not shown as to how they felt mis-guided and hence any action on their part in not filing any declaration or taking licence will tantamount to suppression of facts. 4. The point that falls for consideration is whether the appellants could be held to be guilty of suppression of facts by withholding of information in regard to their manufacturing activity in relation to Item 68 goods in their timber division as the appellants admittedly did not .....

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..... nder Notification 2/81, for exemption from licensing control. This clearly shows that the appellants were aware of their rights and obligations so far as the Notification No. 77/83 is concerned. The appellants other Units were also clearing goods on payment of duty. It is therefore not understandable as to how the appellants when they knew of their rights for the purpose of Notification 77/83 and the requirements and other formalities thereunder, omitted to take note of the overall limit fixed for clearance of excisable goods in terms of Notification 77/83 as also 77/85 and proceeded to avail of the benefit of such notification. In regard to the appellants plea that they did not take out a licence based on their understanding of Notification and therefore they could not be held to be guilty of suppression of fact, we observe that the appellants having explained as to how they reckoned the limit of clearance of excisable goods and how they felt that the particular notification would not apply to them, they have not at any stage brought to the notice of the authorities nor shown before us that there was any confusion in this regard either in their mind or in the minds of the autho .....

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..... respect of the products being manufactured by them and in the case of Padmini Products cited supra, there had been an element of uncertainty in regard to what is considered as handicrafts by various Govt. agencies. In the present case the circumstances as existed in the two cases dealt with in the judgments of the Hon ble Supreme Court relied upon by the appellants, are not there. In the present case the appellants had not furnished the necessary data required for availing the benefit of Notification 77/83 as also 77/85 and it was a non-bona fide act on their part when the wording of the notification in regard to limit of total value of clearance of excisable goods was crystal clear so far as the appellants were concerned. In this view of the matter we hold that invoking the provisions of Section 11A for longer period by the learned lower authority for demand of duty is maintainable in law. The appellants have also pleaded that the addendum issued was after the amendment to Section 11A under which the notice was required to be issued by the Collector where the extended time limit was being invoked. It is seen that there is no dispute that the demand has been originally raised by is .....

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