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2015 (7) TMI 266

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..... sion, the Tribunal was correct in setting aside the demand on the ground that the department was aware of the activities of the appellant/assessee and, therefore, post August, 1996, the case of suppression, as held by the adjudicating authority, cannot be sustained. The plea of the appellant is that if there is no suppression post August, 1996, no extended period could be invoked post August, 1996 and, therefore, the same analogy will have to be applied for the period prior to August, 1996 as well. That plea cannot be sustained as all the activities of the appellant/assessee came to light based on investigation by the Department and recording of statement in August, 1996. - Therefore, for the period prior to August, 1996, the department .....

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..... paying labour charges in addition to a fixed amount of ₹ 50,000/- towards the following services rendered by the appellants :- i) provide covered space of a minimum area of 200 sq.ft., for the purpose of storage of materials; ii) provide open space of a minimum area of 12,500 sq.ft., including electrical power upto a maximum of 5HP for taking up furnishing work of housing containers/insulated containers, etc.; iii) provide all necessary facilities including manpower and personal computer and undertake the stores management including receipting, issues, storage accounting etc., and taking up the responsibilities for the physical controlling of the total material; iv) provide round the clock security service; v) arrange .....

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..... the following order :- 1) I demand an amount of ₹ 2,55,000/- under Rule 9 (2) of Central Excise Rules, 1944 read with proviso to Section 11A (1) of Central Excise Act, 1944; 2) I impose a penalty of ₹ 2,55,000/- under Section 11AC of Central Excise Act, 1944 read with Rule 173Q, 226 of Central Excise Rules, 1944; 3) Interest payable under Section 11AB also to be paid in terms of Section 11A of Central Excise Act, 1944. 5. Aggrieved over the said adjudication order, the assessee preferred appeal to the Commissioner (Appeals), who, by order dated 28.10.03, while modifying the penalty and interest imposed on the appellant, on the question of demand, confirmed the order passed by the adjudicating authority. 6. The a .....

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..... herefore, the expenses incurred for providing such services were in the nature of overheads essential for manufacturing activity. We, therefore, uphold the duty demand. We also find no merit in the assessee's contention that the entire demand is barred by limitation for the reason that they have not been able to establish any basis for the belief that such charges were not includible in the assessable value, let alone a bona fide belief. Intention to evade payment of duty is clearly brought out for the reason that the receipt of services charges from their principal was not disclosed to the Department. However, we find force in the submission that the demand for the period subsequent to August, 1996 is not sustainable as suppression can .....

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..... s of the appellant/assessee and, therefore, post August, 1996, the case of suppression, as held by the adjudicating authority, cannot be sustained. The plea of the appellant is that if there is no suppression post August, 1996, no extended period could be invoked post August, 1996 and, therefore, the same analogy will have to be applied for the period prior to August, 1996 as well. That plea cannot be sustained as all the activities of the appellant/assessee came to light based on investigation by the Department and recording of statement in August, 1996. Therefore, for the period prior to August, 1996, the department was justified in invoking the plea of suppression for larger period. The findings recorded by the Tribunal insofar as the pe .....

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