TMI Blog2007 (3) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... s sister concern at Raipur and penalty of Rs. 5,00,000,00/- levied on its head office at Kolkata under Rule 209A of the Rules were unjust and illegal. Principal grievance of the Appellant was that initiation of proceedings under proviso to Section 11A(1) of the Act, on self same facts thrice was unwarranted when for the self same period two adjudication proceedings have already failed in terms of order dt. 13-6-2002 of CESTAT reached to finality without any appeal by Revenue against that order before higher courts. 2.1 The ld. Senior Counsel Mr. Chandrasekharan, appearing for the Appellant submitted that the appellant is a manufacturing unit set up in B-129 MIDC Industrial Area, Butibori, Nagpur by its parent company having its head office at Kolkata and it was 100% EOU established in accordance with the letter of Permission/Intent (LOP/LOI) BEARING No. PER/23 (1994)/EOP/575/93 dt. 17-1-1994 issued by the Secretariat for Industrial approval, Deptt. of Industrial Devp. in the Ministry of Industry, Govt. of India, New Delhi. Its final product was processed fabrics manufactured from dyeing and finishing of the Grey Fabric. In accordance with the approval of the Ministry and license ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h unit. The goods relating to Raipur unit was identified by Invoice with Sl. Number marked R-O. In respect of all sales, monthly return in from RT-13 were filed for respective month before the Central Excise Authorities at Nagpur clearly mentioning therein DTA permission, issued by the Noida authority as well as the Bombay authority in terms of letters dated 12-5-93 and 24-8-1994 as aforesaid respectively. The ld. Counsel drawing attention to page 47 of the paper book which contained copy of from RT-13 relating to the month of November, 1994 and specifically to column No. 5 of that form which exhibited DTA permission number and date, submitted that the sales return filed before the Nagpur Excise Authorities made it abundantly clear that the respective quantity under sale related to the respective permission granted by the Noida Authority and Bombay Authority and there was neither concealment nor suppression of fact at any point of time nor the Authority objected to such act of the appellant at any time. Entire act of the appellant was bona fide and there was no intention to evade duty. He demonstrated that such was the practice followed throughout the impugned period and the sample ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty leviable under Section 12 of the Customs Act, 1962. 2.6 The learned Counsel for appellant submitted that taking into consideration the proviso appearing under Section 3(1) of the Act, and the amendment made thereto by Finance Act, 2000 with retrospective effect from 11-5-1982 read with the Notification No. 101/93-C.E. dt. 27-12-1993 and Notification No. 2/1995 dt. 4-1-1995, the Hon ble Tribunal came to the conclusion that even after amendment to the proviso under Section 3(1) to the Central Excise Act, 1944, the nature and quantum of exemption granted by the exemption Notifications, operated and demand in question being related to a period prior to 16-9-1999, the nature and quantum of exemption remained in tact. It was, further, held by the Tribunal that the finding of the Commissioner of Central Excise that the appellant was guilty of short payment of duty was not justified under law for which impugned orders were set aside. 2.7 On the aforesaid factual back drop, it was submitted by the ld. Counsel for the Appellant that the third adjudication under appeal was by mere change of opinion on self same facts which were all along before the adjudicating authority in the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C.) , Euro Cotspin Ltd. v. Commr. of Central Excise, Chandigarh reported in 2001 (127) E.L.T. 52 ( Tri.-Del.), Commissioner of Central Excise, Indore v. Siddharth Tubes Ltd. reported in 2004 (170) E.L.T. 331 (Tri.-Delhi) and also relied on the CESTAT order dated 13-6-2002 in the case of the appellant which related to two earlier adjudications done against the appellant on the same set of facts for the self same period. He further submitted that the present proceeding relating to the period Sept., 1994 to July, 1996 consisted the broken periods Sept., 1994 to March, 1995 and April, 1995 to July 1996 which were subject matter of litigation in appeal in order dt. 13-6-02 of CESTAT. 2.9 In short, submission of the ld. Counsel was principally that the entire adjudication process based on self same facts was time-barred and the ld. Adjudicating Authority who passed the order on 24-3-01 in the Order-in-Original No. 11/01 had no benefit of the CESTAT order dated 13-6-2002 for which he erred in law to reopen the concluded issues and the ill found proceeding should not penalize the appellants nor ask for any liability being unsustainable. 3. The ld. Senior Counsel Shri N.C. Roychowdhury ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95 and for the period from April, 1995 to July, 1996 in two different adjudications earlier completed. The undisputed facts were that the appellants unit was at Nagpur which was 100% EOU and its sister unit was at Raipur which was also a 100% EOU. Both the units were concerns of the same company having head office at Kolkata. The Raipur unit, to avail facility of final processing was sending its goods to the present appellant for processing and sale at Nagpur which was well known to the Authorities as early as 23-8-1994 in view of letter of permission issued by Raipur Excise Authority to transfer such goods to Nagpur, following excise procedure and sale at Nagpur corroborated by Excise Return filed before Nagpur Authority. Both the units were granted permission by two different Development Commissioners for DTA sale of the respective quantities. The sales made by the appellant for the above two periods were duty paid and corroborated by RT-13 Return were available in record all along and the nature of duty payable in respect of the aforesaid two periods were subject matter of adjudication reached to finality by Tribunal s order dated 13-6-2002. Quoting permit No. of Raipur unit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary facts relevant to the assessment, he is under no obligation to instruct the Income-tax Officer about the inference which the Income-tax Officer may raise from those facts. The terms of the Explanation to Section 34 (1) also do not impose a more onerous obligation. Mere production of the books of account or other evidence from which material facts could with due diligence have been discovered does not necessarily amount to disclosure within the meaning of Section 34(1), but where on the evidence and the materials produced the Income-tax Officer could have reached a conclusion other than the one which he has reached, a proceeding under Section 34(1)(a) will not lie merely on the ground that the Income-tax Officer has raised an inference which he may later regard as erroneous. . (emphasis supplied) 5.2 Duty liability remains undisputed in absence of any mis-statement and there was no wilful mis-statement or suppression of facts brought to the notice of Tribunal in the course of hearing and to the specific question put to bring nature of mis-statement to the notice of Tribunal, Revenue failed to show that and also could not controvert the statement recorded from Shri Chaturvedi o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure, by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise, the assessing authority has to draw inference as regards certain other facts; and ultimately from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable : See Calcutta Discount Co. v. Income-tax Officer - (1961) 41 1TR 191. 201 (SC). As further observed in that case : Does the duty, however, extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must he in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else-far less the assessee- to tell the assessing authority what inferences, whether of facts or law, should be drawn. Indeed, when it is remembered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at different stages, when the classification was filed, when the first show cause notice was issued in 1985 and also at the stage when the second and the third show cause notices were issued in 1988. At all these stages, the necessary material was before the authorities. They had then taken the view that M/s. Pharmachem Distributors was not a related person. If the authorities came to the conclusion subsequently that it was a related person, the same fact could not be treated as a suppression of fact on the part of the assessee so as to saddle with the liability of duty for the larger period by invoking proviso to Section 11A of the Act. So far as the assessee is concerned, it has all along been contending that they were not related persons, so, it cannot be said to be guilty of not filling up the declaration in the prescribed proforma indicating related persons. The necessary facts had been brought to the notice of the authorities at different intervals from 1985 to 1988 and further, they had dropped the proceedings accepting that M/s. Pharmachem Distributors was not a related person. It is, therefore, futile to contend that there has been suppression of fact in regard M/s. Phar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellant. (emphasis supplied). 5.5 It may also be appreciated that what cannot be done directly cannot be done indirectly. When Assessing authority has no power, he cannot be permitted to achieve such object by resorting to proceeding under Section 11A of the Act, by way of reopening the assessments earlier completed and reached to finality. It is also the rule of law that a case calls for reassessment when fresh materials come to light and there was concealment made by the assessee. But no self same material which were subject to test twice and not merely once and that too when both adjudication proceedings have reached finality without being assailed by Revenue before higher courts after this Tribunal passed an order on 13-6-2002, commonly disposing both the prior adjudications as aforesaid, no more leaves scope for repetitive proceeding. A full Bench of Delhi High Court in the case of CIT v. Kelvinator of India Limited, 256 ITR 1 (Del.) after approving Jindal Photo Films Ltd., (1998) 234 ITR 170 had held that It is a well-settled principle of law that what cannot be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in the course of hearing for which the third adjudication proceeding was unwarranted. 5.7 There was no material brought by Revenue to prove mala fides of appellant nor any cogent, credible or convincing remarkable evidence to prove intention of the Appellant to evade duty. The only cry of Revenue was permit number of the Raipur unit was quoted by Appellant in its Returns filed. This cannot be construed to be mis-statement nor wilful intention to evade duty for giving shelter to the third adjudication proceeding by extended period. In the case of EWAC Alloys Limited v. Union of India reported in 1995 (80) E.L.T. 759 (Bom.) it was held that : It is now well settled by various judgments of the Supreme Court that under Section 11A of the Central Excise Act, the Excise Officer can initiate proceedings where the duty has not been levied or short-levied within six months from the relevant date. However, this period to commence proceedings under proviso to Section 11A(1) stands extended if the duty could not be levied or short-levied due to fraud, collusion, wilful mis-statement or wilful suppression of facts. In the case of Tamil Nadu Housing Board v. Collector of Customs [reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 276 (S.C.) = 1989 (2) SCC 127 where at page 131 of the report, this Court observed that in order to sustain an order of the Tribunal beyond a period of six months and up to a period of five years in view of the proviso to sub-section (1) of Section 11A of the Act, it had to be established that the duty of excise had not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. It was observed by this Court that 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 beyond the period of six months had to be established. 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. (emphasis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght in saying that the officers were not actuated by any mala fide in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Shri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual mala fides but with the fact that the officers, in reaching their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view rightly criticized this conduct of the Assistant Collector and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is bind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same principle-namely, that of a setting to rest rights of litigants, applies to the case where a point, fundamental to the decision taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might success some traverse which had not been taken. 5.10. Ld. Sr. Counsel for Revenue argued that res judicata does not apply to fiscal proceedings. There is no disagreement to this proposition. But facts of past, in record remaining unchanged does not give rise to a new proceeding. Hon ble Supreme Court in the case of Radhaswami Satsang v. Commissioner of Income-tax 193 ITR 321 (SC) held that - We are aware of the fact, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all ..... 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