TMI Blog2011 (3) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... , SSC, for the Respondent. [Judgment per : Harsha Devani, J. (Oral)]. By this petition under Article 226 of the Constitution of India, the petitioners have challenged show cause notices dated 2-7-2002 calling upon the petitioners to show cause as to why excise duty to the extent stated therein should not be recovered under Section 11A of the Central Excise Act, 1944 (the Act); penalty should not be imposed under Rule 173Q of the Central Excise Rules, 1944 (the Rules) and interest at the prescribed rate should not be recovered under section 11AA of the Act. 2. The petitioner No. 1, a Public Limited Company, is inter alia engaged in the business of manufacture of Deoiled cakes of Soyabean/Ground-nut/Mustard/other edible oil seeds and has two units at Kadi in Mehsana district. The above units of the petitioner company have been permitted to work as 100% Export Oriented Undertakings, by the Government of India. The two units of the petitioner company are known as Unit No. 1 and Unit No. 2 , where the petitioner company is manufacturing deoiled cakes of edible oil seeds for the purpose of their export to foreign countries. The petitioners have been granted necessary permi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-charge of the petitioners factories never raised any objection of whatsoever nature against the petitioners action of removal of the by-product falling under SH No. 1503.00 at nil rate of duty. However, the Deputy Commissioner of Central Excise and Customs, Mehsana-II, the third respondent herein, issued six show cause notices to the petitioner company, three for each of the units. covering the period from September 1999 to December 2000/January 2001 for the above referred two units, thereby proposing to recover excise duties on Solvent Extraction Raw Oil/Crude Oil removed by the petitioners from the above referred units, on the ground that the said by-products removed by the petitioner company in the Domestic Tariff Area (DTA) would attract excise duty under the proviso to Section 3 of the Central Excise Act, 1944, and accordingly, the petitioner No. 1 company was required to pay excise duties on the said by-product as per the rates of customs duty applicable to similar goods imported into India, although similar goods manufactured in India were chargeable to nil rate of duty under SH No. 1503.00 of the Tariff. The said six show cause notices came to be issued by the third res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisability or otherwise of the by-product arising in the petitioners factories. It was submitted that, therefore, the action of the second respondent in issuing two show cause notices invoking larger period of limitation in the facts of the present case, is wholly without jurisdiction. 7. Inviting attention to the six show cause notices which had been issued earlier, it was pointed out that it has been alleged in the said show cause notices that the units had not filed declaration under Rule 173B of the Central Excise Rules, 1944. Referring to the impugned show cause notices, it was pointed out that the allegations contained in the said notices are more or less identical to the allegations contained in the earlier show cause notices. It was submitted that when for the same subject matter which was within the knowledge of the Department, six show cause notices came to be issued from May 2000 onwards and six orders in original came to be passed thereafter, in July 2002, the Commissioner by issuing show cause notices in question has no power to allege suppression of facts to invoke larger period of limitation. It was submitted that there is nothing on record to indicate as to what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances the contention that the extended period of limitation could not be invoked, is without any merit. Inviting attention to the impugned show cause notices, it was submitted that insofar as the earlier show cause notices are concerned, the same had been issued by the Deputy Commissioner. However, the present show cause notices have been issued by the Commissioner of Central Excise and that, on a plain reading of the show cause notices, it is apparent that the same have been issued pursuant to intelligence gathered that the said unit was evading central excise duty by misusing the facilities provided under Notification No. 8/97-C.E., dated 1-3-1997 and clearing the very by-product, that is, Soyabean Solvent Extraction Raw Oil/Crude Oil falling under Sub Heading 1503.00 of the Central Excise Tariff Act, 1985 without payment of central excise duties. It was submitted that in the circumstances, the impugned show cause notices have been issued pursuant to intelligence gathered and investigation carried out pursuant thereto, in the circumstances, it cannot be said that the present show cause notices as well as the earlier show cause notices have been issued on a similar set o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervals 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. Pharmachem Distributors being a related person. On that score, we are unable to uphold the invoking of the proviso to section 11A of the Act for making the demand for the extended period. 11. In Hyderabad Polymers (P) Ltd. v. Commissioner of Central Excise, Hyderabad (supra), the Court held that once the earlier show cause notice, on similar issue has been dropped, it can no longer be said that there is any suppression. The extended period of limitation would thus not be available. 12. In ECE Industries Ltd. v. Commissioner of Central Excise, New Delhi (supra), the Supreme Court held thus : [4] In the case of M/s. P B Pharmaceuticals (P) Ltd. v. Collector of Central Excise reported in 2003(2) SCALE 390, the question was whether the extended period of limitation could be invoked where the Department has earlier issued show cause notices in respect of the same subject-matter. It has been held that in such circumstances, it could not be said that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 9(1), 9(2) and Rule 49 read with Rule 100(D), 100(E) and Rule 173-F of the Central Excise Rules, 1944, now Rule 4(1) read with Rule 8(1) and Rule 17 of the Central Excise Rules, 2002, hence, such act amounts to mis-statement/ suppression of facts on the part of the assessee and as such, proviso to Section 11A (l) of the Central Excise Act, 1944 for extended period of five years would be invokable in this case. 16. On a conjoint reading of the earlier show cause notices and the present show cause notices, it is apparent that the facts stated therein as well as the allegations made therein are more or less similar. The only difference, as pointed out by the learned counsel for the respondents is that in the impugned show cause notices, there is a reference to intelligence gathered by the central excise authorities and statements recorded. However, though there is a reference to visit by the central excise officers to the factory of the petitioners, the date of such visit has not been mentioned. However, the statements of the authorized signatory have been recorded on 17-1-2000 and 23-3-2000, statement of the President (Works) of the Unit No. 1 had been recorded on 21-3-2000 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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