TMI Blog2018 (2) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-2-2018 - Ms. Sulekha Beevi C.S., Member ( Judicial ) And Shri Madhu Mohan Damodhar, Member ( Technical ) Shri C. Ramkumar, Advocate for the Appellant Shri N. Rajagopalan, Special Counsel for the Respondent ORDER Per Bench The above appeal was originally disposed by the Tribunal vide Final Order No. 449 to 454/2009 dated 16.4.2009. The appellants filed appeal before the Hon ble High Court of Madras and vide judgment dated 9.2.2017, the Hon ble High Court remanded the matter to the Tribunal to consider the issue of limitation. The Hon ble High Court has specifically directed that in remand proceedings the Tribunal shall not enter into the merits of the case and shall limit the adjudication on the issue of limitation. The relevant portion of the judgment of the Hon ble High Court is reproduced below:- 8. In the present case, it is evident from the record that the assessee has challenged the invocation of the extended period of limitation and raised the specific ground among other grounds before the CESTAT in this regard. However, the order of the CESTAT does not reflect any findings on the point of extended period as raised by the appellant and also issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment. In this letter, it was stated that M/s. CPSML is intending to send raw materials to appellant for conversion into cotton yarn on job work basis. The appellants were thus doing only job work for the raw materials supplied by M/s. CPSML and were under no liability to discharge duty. There was a Memorandum of Understanding entered into between appellants and M/s. CPSML wherein it was agreed that the duty would be discharged by M/s. CPSML. Thus, when the department was put to knowledge that appellant herein was only a job worker for M/s. CPSML, the duty demanded invoking extended period is unsustainable. 2.3 To support his contentions, he relied upon the decision in the case of Varoc Polymers Pvt. Ltd. Vs. Commissioner of Central Excise, Noida reported in 2016-TIOL-1224-CESTAT-ALL. The ld. counsel argued that in the present case even though the appellant as well as M/s. CPSML intimated the department that the raw materials are sent from M/s. CPSML to the appellant for job work and the finished goods are cleared from the appellant unit, the department failed to verify the same till the visit of the officers from the DGCEI. If the officers had conducted verification after r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t department has not conducted verification of power Consumption (iii) that in view of Memorandum of Understanding (MOU) entered with M/s CPSML, they had taken over the appellant factory. This fact was intimated to department and the department ought to have conducted verification at the unit of M/s CPSML. Various other decisions were also relied by the Counsel for appellant. 3. On behalf of Revenue, the Ld. Special Counsel, Sh. K. Rajagopalan appeared and argued the matter. His arguments are summarized as under. 3.1. The only issue before this Bench is to record a finding on the justification for invoking the extended period of limitation. In reply to SCN, the appellant had not put forward any ground contesting the invocation of larger period. 3.2. In the present case, the invocation of extended period is legal and proper as there is clear suppression of facts with intent to evade payment of duty. The mahazar recorded on the date of search (26.06.2002) establishes there was shortage of raw material (cotton), as well as finished products (cotton cone yarn). The discrepancy noted is as under:- Description of the goods Physical Stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty and therefore the invocation of extended period in legal and proper. 4. Heard both sides. 5. For better appreciation, the relevant section 11A(1) along with proviso is reproduced as under:- Section 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment releating to the rate of duty on or of any approval, acceptance of assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice Provided that where any duty of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger and Sh. M. Swaminathan Deputy Manager (Sales) in addition to the witnesses. Nothing is forth coming from their statements explaining the shortage. The discrepancies noted in the Registers maintained are:- Opening stock as on 26.6.2002 As per Annexure V Register (RG 1) Physical Stock Available Difference Cotton (Raw material) 32285.1 23100.00** (-) 9185.1 60s cone yarn 2850.0 2200.0 (-) 650.0 2/20s DHPR 3000.0 6100.0 (+) 2200.0 40s Cone Yarn NIL NILNIL Stock of finished goods that were packed on26.6.2002 upto 10.30 Hrs. i.e. from (6.00 hrs to 10.30 hrs.) 1. 60s Cone Yarn 400.0 2. 2/20s DHPR Nil 3. 40s Cone Yarn Nil ** This 23100 Kg. includes 7900 Kg. of cotton received from C.P. Spinning Mills (P) Ltd. Puliampatty vide their challan No. 11 dated j12.6.2002 which was not ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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