TaxTMI 
TaxTMI 
2006 (7) TMI 458
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....tes to Refractories sold by the Appellant to M/s. Visakhapatnam Steel Plant (in short VSP) during the period from September 1993 to December 1995. The said Refactories were sold pursuant to four Purchase Orders dated 9-9-1993, 11-7-1994, 24-2-1995 and 16-5-1995. All the said supplies were under 'Duty Exemption Scheme' contained in Chapter VII of the Export and Import Policy 1992-97 (in short the Import Policy) and were made in discharge of the export obligation cast upon the Appellant under Advance Intermediate Licences (in short AILs) issued to it. The said AILs were issued to the Appellant against surrender of Advance Licences (in short ALs) issued to VSP. (b) A Show Cause Notice dated 21-1-1997 was issued alleging that surrender of ALs by VSP against which AILs were issued to the Appellant, amounted to additional consideration. It was alleged that since the said additional consideration was not disclosed and it was claimed that there was no additional consideration over and above the price, there was suppression of facts and misstatement on the appellant's part. In its reply dated 30-5-1997, the appellant made detailed submissions on the issue relating to limitatio....
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....before the licensing authorities to issue Advance Intermediate Licence to the Appellant under the coverage of certificate and Advance Licence of VSP. (III) 18-10-1993 - Reply of the Assistant Collector to the Appellant's letter dated 29-9-1993 mentioned above. (IV) Letter dated 19-10-1993 to the Collector of Central Excise and Customs, Bhubneshwar: Along with these letter copies of letters dated 29-9-1993 and 18-10-1993 addressed to the Assistant Collector were forwarded to the Collector. In this letter it was specifically stated that the duty free Advance Intermediate Licences would be issued to the Appellant by the DGFT on the basis of Advance Licences issued in favour of VSP and that the said supplies will be on deemed export basis. (V) Letter dated 20-10-1993 to the Assistant Collector of Central Excise and Customs, Rourkela: In this letter it was specifically stated that the supplies in question will be made to VSP under deemed export category under Chapter X, Para 122 of the Exim Policy 1992-97. As recorded in this letter, copy of the Advance Licence of VSP was also filed with the Central Excise Authorities. It was further stated in this letter that on the basis o....
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....ry under cover of proper Central Excise Invoices, on payment of Central Excise duty as well as Central Sales Tax. Copies of Invoices, which were the duty paying documents, were regularly filed with the Department along with monthly RT-12 Returns. Invoice-wise details of such payments of Central Excise Duties and Central Sales Tax have been given in the statements. (XI) For lodging claims under Para 122(c) of the Import Policy, the Appellant was regularly applying before and obtaining from the Central Excise Authorities monthly certificates as regards total payment of Central Excise duty during the month on the supplies made to VSP under Deemed Export Category, copies of some such certificates duly signed by the Inspector of Central Excise and the Superintendent of Central Excise having jurisdiction over the Appellant's factory. (XII) Audit Teams, both from the office of CAG as well as from Central Excise Department visited the Appellant's factory on a number of occasions during the relevant years. The said visits of the Audit Teams took place on 2-3-1993, 24-8-1994, 6-9-1994, 24-7-1995 and 26-8-1995 and 21-6-1996 during the relevant years. The Audit Teams thoroughly....
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.... Act, 1944 (in short the 1944 Act) exist or was satisfied in the present case. (c) In the impugned Order the Appellant's submissions as regards limitation have been rejected at internal page 7 of the order by the Commissioner holding :- (i) For the period up to March 1994 he held that the assessment were provisionally made and were then finalized on 30-10-1996. (ii) For the period from April 1994 to March 1995 the Commissioner has held that additional consideration was not disclosed in the Invoices and it was declared that there was no additional consideration. The first reason, supra, arrived by the Commissioner, that the assessments for the period up to March 1994 were provisional and that these were finalized on 30-10-1996 is factually incorrect and contrary to records. The assessments for the relevant period of September 1993 to December 1995 were finalized on different dates between 3-1-1994 to 20-2-1996 and dates of assessment of each RT-12 Return for the said period have been submitted at pages 190 to 1991 of this Appeal and the connected RT-12 Returns have also been filed by the appellants. The said dates of assessment mentioned in a char....
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....the Hon'ble Supreme Court was pleased to hold that suppression of facts is not a failure to disclose legal consequences of a certain provisions. The said Paragraphs 12 and 14 are reproduced below :- "12. In the case of Padmini Products v. Collector of Central Excise reported in 1989 (43) E.L.T. 195, this Court held that in a given case where there is a scope for believing that the goods were not excisable and consequently no licence was required to be taken then the extended period of limitation was inapplicable. Mere failure or negligence on the part of the manufacturer either not to take out the licence or not to pay duty in cases where there is a scope for doubt does not attract the extended period of limitation. Unless there is evidence that the manufacturer knew that the goods were liable to duty or he was required to take out a licence, there is no scope to invoke the proviso to Section 11A(1). For invoking the extended period of limitation, duty should not have been paid or short-levied or short-paid or erroneously refunded on account of fraud, collusion or wilful suppression or misstatement of facts or wilful contravention of the Act or the Rules with the intention to eva....
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....awa Co. Ltd. v. CCE) - In this judgment in paragraphs 27 and 29 the Hon'ble Supreme Court held as under :- "27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462] we find that "suppression of facts" can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty, when facts were known to both the parties the omission by one to do what he might have done, not that he must have done would not render it suppression. It is settled law that mere failure to declare does not amount to wilful suppression. There must be some positive act from the side of the assessee to find wilful suppression. Therefore, in view of our findings made herein above that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in proviso to Section 11A of the Act. We are therefore, of the firm opinion that where facts were known to both the parties as in the instant case, it was not op....
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....n of any of the provisions of this Act or of the rules with intent to evade payment of duty...." 6. 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 misstatements or suppression of facts are concerned they are clearly qualified by the word "wilful" preceding the words "misstatement 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". It is, therefore, not correct to say that there can be a suppression or misstatement of fact, which is not wilful an yet constitutes a permissible ground for the purpose of the proviso to Section 11A. Misstatement or suppression of fact must be wilful." (vi) 1995 (78) E.L.T. 401 (Pushpam Pharmaceuticals Company v. CCE) : In this judgment in paragraph 4, the Hon'ble Supreme Court held as under :- "4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant ....
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....y or short-payment or erroneous refund is by reason of fraud, collusion or wilful misstatement or suppression of facts or contravention of any provisions of the Central Excise Act or the rules made thereunder; and (3) that the same has been done with intent to evade payment of duty by such person or agent. These requirements are cumulative and not alternative. To make out a case under the proviso, all the three essentials must exist." (viii) 2000 (115) E.L.T. 35 (National Radio & Electronics Co. Ltd. v. CCE) : "Demand - Limitation - Charges for maintenance services of computers during warranty period collected by assessee - Contracts for the sales of the computers disclosed to department that assessee entitle to collect such charges - No suppression - Larger period of limitation not invocable - Appeal allowed - Section 11A of Central Excise Act, 1944. - Show cause notice alleged that the Appellants had suppressed the fact that they were entitled to collect charges for maintenance services of the computers they sold during the warranty period thereof. It is an admitted fact that the contracts for the sales of the computers had been disclosed by the Appellants. These contracts sh....