TMI Blog2009 (10) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-2003. As per the directions of the A.C., they paid the Excise and Customs duties in respect of the quantity of raw material, such as cotton yarn and consumables etc. contained in the finished goods lying with them in stock, as on 1-9-2003, along with duty involved in capital goods. 2. Later, from the state of Stock of Work in Progress (W.I.P) submitted to the Dena Bank for the month of August, 2003, the preventive staff, Khopoli Dn. on 20-9-06, detected that the respondents had not paid the duty in respect of the raw material contained in the said W.I.P. stock. Shri Subhash Chandra Panda, the overall in charge of the factory of the respondents, in his statement recorded by the preventive officer on 20-9-06, under Section 14 of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11AB of the Central Excise Act, 1944. Aggrieved, the respondents preferred an appeal before the Commissioner (Appeals). The Commissioner (Appeals), vide Order-in-Appeal No. SRK/208/RGD/2008 dated 21-4-2008, allowed the appeal, setting aside the Order-in-Original. 4. The Revenue in its Grounds of Appeal has contended as under : (i) The Commissioner (Appeals) erred in concluding that the respondents were not required to declare to the Department, the stock of WIP; and that there was no positive act of suppression on the part of the respondents because - (a) it is the legal duty of the respondents to declare the full stock of the raw material(including the stock of raw material contained in the WIP), in respect of which certain co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to public, theory of universal knowledge cannot be attributed to the Department in the absence of any declaration by the party and extended period of limitation is invocable and the demand is not barred by limitation. 6. The learned advocate of the respondents, on the other hand, submitted as under :- (i) Their manufacture of grey fabrics was from materials i.e. cotton yarn produced or manufactured in India and, hence, the procurement was governed by Notification No. 1/95-C.E., dated 4-1-1995. As per condition in para 1(d), there was a requirement of execution of Bond for safeguarding duty on capital goods, packaging materials and raw materials. Likewise, under para 6 of the said notification, there was a requirement of payment of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard. (iii) In any case, whatever the duty paid on inputs, capital goods, as well as work-in-progress was available to the respondents as credit and hence, there was no inducement to evade payment of duty, which gets substantiated from the fact that the respondents applied for registration on 10-9-2003 and obtained registration on 12-9-2003 and availed credit of the duty paid on capital goods, spares and raw materials. When the entire exercise is leading to duty neutral, as whatever the duty, the respondents would have paid on work-in-progress materials, was available as credit to them on de-bonding, the demand is not sustainable, based on the following judgments : (a) 2002 (143) E.L.T. 22 (S.C.) - Bhilwara Synthetics Ltd. (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of any suppression, misstatement, etc. as the respondents had made an application for de-bonding to ACCE, after having obtained inprinciple approval from the Development Commissioner and the ACCE, through letter dated 25-8-2003, required the respondents to pay duty on capital goods, spare parts, packing materials and raw materials. From the above, it is clear that ACCE did not direct the respondents to pay duty on stock of goods-in-progress. 9. The respondents, through their letter dated 5-9-2003, informed their payment of duty on capital goods, spare parts, packing materials and raw materials. The ACCE, through letter dated 17-9-2003, informed the Development Commissioner that the Respondents had paid all dues and there was no o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them and hence, there was no inducement to evade/avoid payment of duty on work-in-progress and hence, extended period is not invocable, based on the following judgment : (a) 2000 (119) E.L.T. 718 (Tri.-LB) - Jay Yuhshin Ltd. (b) 2007 (81) RLT 479 (Tri.-Che) - S.R.F. Ltd. It seems that only because of the lack of proper guidance by the Department to the respondents, this aberration occurred. From the facts and circumstances of the case, it is apparent that there was no intention to evade payment of duty on the part of the respondents. However, as a measure of abundant caution, the respondents paid the duty of Rs. 4,13,369/- on 25-9-2006, notwithstanding the difference in the interpretation of the provisions of law. 13. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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