TMI Blog1997 (6) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Bangalore for deciding the issue of applicability of the extended period of limitation. At the outset Shri V. Sridharan, learned Counsel submitted that the appellants are not contesting the issue on merits before us even though the earlier order on merits (Final Order No. 267/94-B1, dated 13-5-94) has been challenged in the Supreme Court. We are, therefore, confining our order to the limitation aspect alone. 2. We have heard Shri V. Sridharan, learned Counsel and Shri K.K. Jha, learned SDR and carefully considered their submissions. 3. The miscellaneous Application No. 253/86 for producing additional evidence in the form of a letter dated 23-6-88 addressed by the appellants to the Assistant Collector of Central Excise, Lalbagh Division, Bangalore, receipt of which the SDR is not in a position to rebut, informing the Department that they are manufacturing pneumatic equipment in Bangalore in collaboration with West Germany firm Festo KG is allowed, having regard to the fact that it is for the first time in the impugned order that the Commissioner of Central Excise raised the contention that the appellants informed the Department about the collaboration agreement only when thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to invoke the proviso to Section 11A, it is not mere failure to pay the duty, there must be something more viz. the assessee must be aware that duty was leviable and must have deliberately avoided to pay the same and the later ruling of the Supreme Court in the case of Pushpam Pharmaceuticals Ltd. v. CCE, Bombay reported in 1995 (78) E.L.T. 401 (S.C.) in mind, and also noting the findings of the Tribunal on the applicability of the extended period of limitation in the cases of Byco International, Inter City Cable Systems P. Ltd. and Engineering and Commercial Agencies v. CCE, Madras reported in 1996 (82) E.L.T. 295 (T) = 1996 (63) ECR 263 and considering the factual background of this case, we hold that the intentional evasion of payment of duty cannot be attributed to the appellants in the above case. (The case of Sonoma Aromatics reported in 1995 (78) E.L.T. 285 (T) = 1995 (56) ECR 54 which has been relied upon by the DR is a solitary instance where the Tribunal has concluded that the extended period would be available to the Department). 6. In the light of the above discussion, we set aside the impugned order and allow the appeal on the ground of limitation. Sd/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the benefit of Notification No. 214/86 is of no avail because the aforesaid declaration was required to be made at the time of claiming the benefit of 175/86 in the classification list at the appropriate time. 9. That the brand name belonged to a foreign manufacturer is also of no avail because in the present case, the foreign manufacturer is also their collaborator and admittedly, the unit is engaged in a programme of joint manufacture and in any case, it is no longer a point before us once the case is confined to the question of time-bar only at this stage. 10. That other cases of other parties in respect of similar issues on interpretation of the notification (and para 7 thereof) had subsequently arisen are of no avail and could not have given rise to any bona fide belief at that time. 11. Similarly the correspondence between the Collector, Belgaum and the Ministry in 1989 with reference to the case of another company relating to this notification does not advance the cause of the appellants in any manner. It is the normal practice of the field officers to refer matters to and seek advice or guidance of their respective seniors in the hierarchy from time to time but su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission. It was open to the appellants to have consulted the best legal luminaries, if that was necessary, and make a proper declaration and pay duty under protest and claim refund, if any, found due subsequently. But, it does not give them a licence to wait for something to happen in future and claim amnesty from the operation of the law till then. 14. The case of Tamil Nadu Housing Board v. Collector of Central Excise, Madras, reported in 1994 (74) E.L.T. 9 (S.C.) also does not help in any manner the appellants in the present case as it lays down those criteria which are required to be followed and about the application of which there is no dispute or even scope of dispute. That it was necessary to show that there was intention to evade payment of duty has to be inferred or judged from the facts and circumstances of a given case and in the present one, since Clause 7 has been introduced and it related to the question of use of brand name of another manufacturer who was not eligible to either using the brand name of such a firm, it was necessary on the part of the appellants to have declared the fact in the prescribed documents at the prescribed time as it was going to have a dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference referred to me as Third Member is as follows :- Whether in the facts and circumstances, the demand was required to be held as time barred and, therefore, appeal was required to be allowed on the ground of limitation or the extended period of limitation was available to the Department under proviso to Section 11A and therefore, the appeal, which has not been pressed on merits, was required to be dismissed in the facts and circumstances of the case. 19. The undisputed fact on record that the appellants are engaged in the manufacture of pneumatic control equipments and is a joint venture of Festo KG, Germany. Dispute arose between appellants and its jurisdictional Central Excise Authorities as regards the availability of small scale Notification No. 175/86-C.Ex., dated 1-3-86 as amended Notification No. 223/87, dated 23-9-87 effective from 1-10-87. Whereas, the appellants jurisdictional authorities were of the view that as the appellants were using brand name of their foreign manufacturer who were not entitled to benefit of small scale exemption the exemption under Notification No. 175/86 was not available to them in terms of Paragraph 7 of the said notification. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the classification list. For this he relied upon the Tribunal decision in the case of Intercity Cable Systems (P) Ltd. v. CCE, New Delhi, reported in 1995 (80) E.L.T. 445 Para 12 wherein it has been observed : We find that there is sufficient force in the appellants contention that in terms of Rule 173B no responsibility was cast on them to declare the trade name and brand name affixed by them in their case. He submitted that the demand in the instant case was held to be barred by limitations, after arriving at a finding that the appellants were acting under bona fide belief in view of the Tribunals judgment and Board clarification. He submitted that on appeal by the Department, the Honourable Supreme Court has dismissed the Revenue s appeal vide Order dated 30th September, 1996. Learned advocate also referred to the Tribunal s decision in the case of Lubri Chem Industries Pvt. Ltd. Bombay v. CCE, Bombay - 1983 (14) E.L.T. 2408 (T). In the said decision, Tribunal had held the invocation of extended period of 5 years justifiable by observing that the appellants had not filed any declaration as regards the use of labels on the drums, containers by virtue of which the goods wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both the sides and have perused the orders of my learned Sister Member (Judicial), Mrs. Jyoti Balasundaram and my learned Brother, Shri S.K. Bhatnagar, Vice President Member (Judicial) after following the decisions in the case of Byco International and Intercity Cable System P. Ltd. has held that there was no intentional evasion of payment of duty on the part of the appellants. Whereas Vice President has held the invocation of larger period justified on the ground of omission of non-disclosure of brand name. I find that the appellants have not disputed this fact that it was not disclosed by them in their declaration or in the classification list that they are affixing their brand name, Festo. I find that the provision of Section 11A have come up for interpretation before the Honourable Supreme Court in a number of cases and in all the cases it has been laid down by the Apex Court that intent to evade duty is the criteria for invocation of larger period. Mere omission by itself is not sufficient to invoke the larger period of limitation unless it can be shown that the manufacturers were having an intention to evade duty also. As such the omission is necessarily to be viewed coupl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
