TMI Blog2015 (1) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... reimbursed by the buyer. In fact such a plea was clearly taken. The factual scenario clearly goes to show that there was scope for entertaining doubt, and taking a particular stand which rules out application of Section 11A of the Act. As far as fraud and collusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word ‘wilful’, preceding the words ‘mis-statement 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.’ Therefore, there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful. - there was no malafide in the show-cause notice and confusion of classification persisted in the industry having led the appellant to be in confusion, the adjudication can be said to be time-barred - Decided in favour of assessee. - E/117 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledge of both sides about the classification sought by the appellant under bonafide belief on the factual scenario aforesaid. No doubt the goods ultimately is held to fall under Chapter 21 of CETA, 1985 but industry had conflict of opinion on classification of the goods in question. Therefore, the appellant may be given benefit of doubt holding that under aforesaid circumstances adjudication is time-barred. 5. Revenue on the other hand supports the order of the authorities below. 6. Heard both sides and perused the records. 7. This is an established fact on record that there is nothing malafide on the part of the appellant either to suppress the fact before the authority or to make any statement to lead to the Department to hold that appellant has intention to cause evasion of duty. When the bonafide of appellant is patent from records in view of the confusion persisting in the industry it would not be proper to hold the adjudication made is within the limitation period. The principle of law laid down by Apex Court in Anand Nishikawa Co. Ltd. Vs. CCE, Meerut - 2005 (188) ELT 149 (SC), as to suppression of fact is reproduced below for appreciation of the genesis of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. [Emphasis supplied] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are known to both the parties, the omission by one to do what he might have done and not that he must have done does not constitute suppression of fact. 15. In Anand Nishikawa Co. Ltd. v. Commissioner of Central Excise, Meerut - (2005) 7 SCC 749 = 2005 (188) E.L.T. 149 (S.C.), while again referring to the observations made in Pushpam Pharmaceuticals Company (supra), this Court clarified the requirements of the proviso to Section 11-A, as follows :- 26... This Court in the case of Pushpam Pharmaceuticals Company v. Collector of Central Excise, Bombay (supra), while dealing with the meaning of the expression suppression of facts in proviso to Section 11A of the Act held that the term must be construed strictly, it does not mean any omission and the act must be deliberate and willful to evade payment of duty. The Court, further, held :- In taxation, it ( suppression of facts ) can have only one meaning that the correct information was not disclosed deliberately to escape payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of willful default. The same was held by Easland Combines, Coimbatore v. The Collector of Central Excise, Coimbatore - (2003) 3 SCC 410 = 2003 (152) E.L.T. 39 (S.C.) wherein this Court held :- 31. It is settled law that for invoking the extended period of limitation duty should not have been paid, short levied or short paid or erroneously refunded because of either fraud, collusion, wilful misstatement, suppression of facts or contravention of any provision or rules. This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or willful misstatement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limitation. [Emphasis supplied] 18. We are in complete agreement with the principle enunciated in the above decisions, in light of the proviso to Section 11A of the Central Excise Act, 1944. However, before extending it to the Act, we would like to point out the niceties that separate the analogous provisions of the two, an issue which received the indulgence of this Court in Associated Cem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vade duty was essentially before the proviso could be invoked. 55. Though it was sought to be contended that Section 28 of the Customs Act is in pari materia with Section 11-A of the Excise Act, we find there is one material difference in the language of the two provisions and that is the words with intent to evade payment of duty occurring in proviso to Section 11-A of the Excise Act which are missing in Section 28(1) of the Customs Act and the proviso in particular 56. The proviso to Section 28 can inter alia be invoked when any duty has not been levied or has been short-levied by reason of collusion or any wilful misstatement or suppression of facts by the importer or the exporter, his agent or employee. Even if both the expressions misstatement and suppression of facts are to be qualified by the word wilful , as was done in the Cosmic Dye Chemical case while construing the proviso to Section 11-A, the making of such a wilful misstatement or suppression of facts would attract the provisions of Section 28 of the Customs Act. In each of these appeals it will have to be seen as a fact whether there has been a non-levy or short-levy and whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the show cause notice must put the assessee to notice which of the various omissions or commissions stated in the proviso is committed to extend the period from six months to five years. That unless the assessee is put to notice the assessee would have no opportunity to meet the case of the Department. It was held : . ..There is considerable force in this contention. If the department proposes to invoke the proviso to Section 11-A(1), the show-cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the Excise Department places reliance on the proviso it must be specifically stated in the show-cause notice which is the allegation against the assessee falling within the four corners of the said proviso.... (Emphasis supplied) 10. It would also be proper to appreciate that this is the consistent view of the Hon ble Supreme Court begi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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