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2009 (8) TMI 908

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..... orrect situation of law cannot be a ground to say that they did not know that they were liable to pay the duty or to contend that the belief was genuine and bona fide. It was necessary for the appellants to appraise themselves of the correct position in law in relation to their duty liability. Merely on fanciful imagination the assessee was not entitled to assume that he had no liability to pay the duty. In the matter in hand, admittedly, the appellants were paying duty in relation to similar storage tanks manufactured for other parties. In this background, it was necessary for the assessee to disclose the ground for distinguishing the work of manufacture of the storage tanks for IOCL from others - appeal dismissed - decided against appella .....

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..... of storage tank for their retail outlet and they were accordingly manufactured by the appellants from October, 1998 to March, 2002. There is no dispute that the transformation of MS plates which were supplied by the IOCL to the appellants for the purpose of fabrication thereof to the storage tanks amounted to manufacture and it attracted the duty liability, though it is the case of the appellants that at the relevant time, they honestly and sincerely believed that the duty liability was upon M/s. IOCL as the primary manufacturer and the appellants were merely providing skilled labour service. It is therefore, their case that by bona fide and genuine belief the appellants were not liable to pay duty for the manufacture of such tanks supplie .....

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..... that they were under a bona fide belief that they were not liable to pay duty and they were merely provider of skilled labour is disputed and denied by the respondent. Learned Advocate appearing for the appellants however fairly submitted that the claim regarding the duty liability on the manufacture of storage tanks supplied to IOCL by the appellants could not be disputed and in fact, on his advice, the appellants have already cleared the duty liability in that regard on 31st January, 2006. He further submits that in the facts and circumstances of the case, it is revealed that the appellants were under bona fide belief that the nature of the work which was rendered by the appellants to the IOCL was in the nature of provider of skilled labo .....

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..... entions on behalf of the appellants have rightly arrived at finding about the intentional evasion of payment of duty by the appellants and therefore, there is no scope for interference in the impugned order. As regards the nature of the work, it is his contention on behalf of the respondent that the work contract which was preceded by the tender issued by M/s. IOCL in that respect clearly revealed the nature of agreement and therefore, merely because there was supervision or supply of basic raw materials by the IOCL to the appellants that itself would not be sufficient to construe that the contract was merely of the nature of labour supply. He further submitted that the very fact that the appellants had not disclosed the fact of manufacture .....

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..... s. Records nowhere disclose that the contracts between the appellants and other parties were different from the one with IOCL. To a specific query in that regard, it has been clearly stated that records nowhere reveal of having led any evidence to the contrary by the appellants in that regard. In the background of these facts merely because there was supervision by IOCL in relation to manufacture of storage tanks for IOCL or that the basic raw material was supplied by IOCL for the manufacture of such storage tanks, that by itself cannot lead to the conclusion that it was mere labour contract. It is not the case of the appellants that the tenders were issued for labour contract. Being so, neither documentary evidence nor any other evidence w .....

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..... If we take into consideration all the facts on record in totality the non-availment of Cenvat credit in the case in hand cannot lead to the conclusion that the appellants had no intention to evade payment of duty. It could be even a calculated move to evade payment of duty that Cenvat credit was not availed of. 9. The law on the point as to whether in such circumstances, the assessee would be liable to pay penalty or not is well settled by the decision of the Apex Court in Union of India v. Dharmendra Textile Processors reported in 2008 (231) E.L.T. 3 (S.C.). Once we disbelieve the contention that there was no intention to evade payment of duty, the invocation of extended period of limitation cannot be found fault with. For the same reason, .....

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