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M/s. India Hume Pipe Co. Ltd. Versus CCE, C & ST, Hyderabad-I

Valuation - reversal of credit u/r 6(3) (b) of the CENVAT Credit Rules 2002 - extended period of limitation - suppression of facts - Held that: - Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. An incorrect statement or wrong method of computation cannot be equated with willful misstatement - The appellant has submitted details of work order as well as filed the ER-1 returns to the department. It is for the department to .....

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Judicial) Shri. R. Sudhinder, Advocate for the Appellant. Shri. Nagraj Naik, Deputy Commissioner (AR) for the Respondent. ORDER The appellant is inter alia, engaged in manufacture of Pre-stressed Concrete Pipes, Bar Wrapped Steel Cylinder Pipes and MS Pipes and is registered with the Central Excise Department. They manufacture both dutiable and exempted pipes. These pipes are captively consumed in turn-key projects for construction of pipelines, which includes manufacture, supply, delivery, lowe .....

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ing separate accounts. As per Rule 6(3) (b) of the CENVAT Credit Rules 2002, the appellants are required to pay an amount of 8% /10% of the price of the exempted final products when not maintaining separate accounts. It is the case of the appellants that while calculating the said amount of 8%/10% value of exempted goods cleared by them they deducted the Excise duty paid on the inputs and thus arrived at the amount required to be reversed. The department entertained the view that appellants ough .....

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the date of receipt of this notice as to why; i) the amount of ₹ 79,13,674/- (Rupees Seventy nine lakhs thirteen thousand six hundred and seventy four only) being the differential amount not paid by them in terms of Rule 6(3) (b) of the CENVAT Credit Rules, 2002/2004 in respect of exempted goods manufactured by utilizing common inputs on which CENVAT credit was availed and cleared by them during the period from March, 2003 to March, 2006 as detailed in Annexure enclosed to the notice shoul .....

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s thus before the Tribunal. 3. On behalf of the appellant, the Ld. Counsel Shri. Sudhinder argued on the ground of limitation. He submitted that the appellant had been filing ER-1 returns, where in the appellant had disclosed the amount paid in terms of Rule 6(3) (b) along with other details. He submitted that the invoices issued by the appellants clearly mentioned that Rule 6(3) (b) of the CENVAT Credit Rules was being followed by the appellant. The Ld. Counsel adverted to the copy of the invoi .....

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ed to the department. That it is practice by the appellant to furnish the copy of details of work order along with split-up details of the rate in regard to the work order to the department and that appellant had submitted split-up details of rate in respect of all work orders during the relevant period. Thus, if at all there was error in computing the value of clearances it was only on wrong interpretation of the provision by which the appellant happened to exclude the excise duty while arrivin .....

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e submitted that the Commissioner has considered the contentions of the appellant in respect of the issue of limitation in the impugned order and has found that appellant has suppressed facts. He adverted to para. 38 of the impugned order wherein the Commissioner has discussed the documents relied by the appellant. He argued that though the appellant had been submitting letters showing the work orders/rates split-up /availment of benefit of exemption the fact that the appellant was paying less a .....

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egal and proper. 5. I have heard both sides. 6. The only grounds put forward by the appellant is that the Show Cause Notice is barred by limitation. The Show Cause Notice dated 24.12.2007 covers the period from March, 2003 to March, 2006. On perusal of records it is seen that vide letters dated 29.03.2003, 23.04.2004, 29.04.2004 and 02.06.2004 etc., the appellant has informed the department that they are not keeping separate accounts and also clearing exempted pipes for Government projects. It i .....

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I have to say that as per the provision contained in CCR, 2002/04, the method opted by the appellant in computing the value of clearances does have some flaw. But it has to be taken note of that the appellant has been continuously submitting the work orders with rate split-up to the department and also informing the department as to the method of computation opted by the appellant. When these facts are very much evident from the letters as well as invoices, the department has issued the Show Cau .....

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made by the Commissioner. As already stated, the letters, details of work order, split-up rates, invoices, reveal the method of computation adopted by the appellant. Department does not dispute these documents. These documents establish that department was put to notice about the computation method adopted by appellant. If there was any error, the department, ought to have pointed out immediately Show Cause Notice ought to have been issued in normal period only. The Honorable, Apex Court in the .....

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