TMI Blog2018 (10) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... acquires knowledge of the irregularity, the suppression would not be obliterated. In the instant case, it has been established that there has been suppression, there has been clandestine removal of excisable goods without payment of excise duty, the assessee having collected excise duty from the customers did not remit it to the department and the assessee did not obtain registration from the department nor maintained any records and obtained registration under the provisions of the Act only on 16.05.2003. Thus, these facts would clearly establish that the extended period of limitation was invocable in the assessee's case. Also, the plea raised by the assessee that they should have been granted the opportunity to pay 25% is unacceptable. If the assessee had collected excise duty, he is bound to remit the duty to the department and cannot retain the same and then contend that due to financial difficulty, he could not remit the same and had remitted a portion of the same in instalments. The factual scenario in the instant case disentitles the assessee for any remedy. CENVAT Credit - it is submitted that the Adjudicating Authority has erroneously denied the Cenvat credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Act and imposition of penalty under Section 11AC when all relevant information were within the knowledge of the department from 02.12.2003 ? 3.During the course of arguments, learned counsel appearing for the assessee submitted that the assessee may be permitted to raise one more question of law revolving on the legal issue and therefore, we heard the learned counsel for the assessee on the said contention as well as the learned standing counsel for the respondent and in addition to the above referred question, the following substantial question of law is also framed for consideration: 2.Whether in the facts and circumstances of the case, the invocation No.30/2004-CE dated 09.07.2004 exempting the excisable goods dealt by the assessee would have retrospective effect though such exemption was withdrawn vide Circular No.703/19/2003-CCE dated 25.03.2003, which withdrew exemption on the products dealt with by the assessee with effect from 01.04.2003 ? 4.The assessee is a manufacturer of cotton yarn dyed woven fabrics falling under Chapter Head 52.07 of First Schedule to the Central Excise Tariff Act, 1985. They had manufactured woven fabrics and cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat credit to the tune of ₹ 21,58,496/- and if this is adjusted as against the duty liability, the balance will be only ₹ 2,11,900/- and the same was also paid on 28.12.2006. 6.The Adjudicating Authority, after considering the facts and circumstances of the case, confirmed the proposal in the show cause notice by passing Order-in-Original dated 28.09.2007. While doing so, the Cenvat credit which was claimed by the assessee, was also denied on the ground that no records were maintained. The assessee was on appeal as against the said order and the Appellate Authority accepted the case of the assessee so far as the eligibility of Cenvat credit to the tune of ₹ 17,76,563/- as against the claim made by the assessee to the tune of ₹ 21,58,496/- and only to that extent, relief was granted by the Appellate Authority vide its order dated 28.11.2008 and in other respects, it was confirmed. The assessee carried the matter before the Tribunal, which, by the impugned order dated 17.04.2015, has dismissed the same. 7.Heard Mr.Akilsuresh, learned counsel appearing for the appellant-assessee and Mr.Sundareswaren, learned Standing Counsel appearing for the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken only with a view to rescind several notifications by issuing composite notification and the policy remained as it was and therefore, the withdrawal Notification No.95/94 dated 25.04.1994 was not a new notification granting exemption for the first time in respect of parts of power driven pumps, but it has clarified the position and made the position explicit which was implicit. 10.In the case before us, Circular No.703/19/2003 dated 25.03.2003 was issued by the Government of India stating that measures like withdrawal of deemed credit, removal of specific duties and removal of exemptions including SSI exemptions on textiles and textile articles, would come into effect from 01.04.2003. The effective rate of duty of the goods which were dealt with by the assessee were stipulated in Notification No.29/2004-CE dated 09.07.2004. Thus, the withdrawal of exemption of deemed credit on the textiles and textile articles came into effect from 01.04.2003. The Government, by notification dated 09.07.2004 in Notification No.30/2004-CE, exempted the excisable goods of description specified in column (3) of the Table in the said notification falling within the Chapter, heading no. and sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nai, [2015 (323) ELT 524 (Mad.)] . 13.The learned standing counsel appearing for the Revenue contended that the issue raised by the assessee was elaborately dealt with by a Division Bench of the High Court of Gujarat in the case of Commissioner of Central Excise, Surat vs. Neminath Fabrics Pvt. Ltd., [2010 (256) ELT 369 (Guj.)] and the said decision is the direct answer to the contention advanced by the learned counsel for the assessee. Further, it is submitted that the decision in the case of Principal Commissioner of Service Tax, Delhi vs. Tops Security Ltd., [2016 (41) STR 612 (Del.) , had in-depth considered the identical issue arising under Section 78 of Finance Act, 1994, which is in pari materia with Section 11AC of the Act and held against the assessee. The factual position has been pointed out by us in the preceding paragraphs. The question would be as to whether the extended period of limitation could have been invoked and as to whether the assessee should have been given the benefit reduced penalty of 25%. Identical issue arose for consideration in the case of Top Security Ltd. , (supra) and the question which was framed for consideration was 'whether the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Central Excise, [2013 (288) ELT 40 (Del.) , where the assessee failed to make payment of the service tax and interest but nevertheless sought to avail the benefit of the reduced penalty in terms of the proviso to section 11AC of the Act and the Court distinguished the earlier decision in K.P. Pouches (P) Ltd. case, supra, and held that it was clear from the conduct of the assessee that he never wanted or showed any inclination to pay the duty or the interest and was throughout contesting the order-inoriginal on merits and in case, the assessee had any grievance with regard to non-compliance of Section 11AC, the grievance should have been raised at the earliest opportunity and the appellant should have deposited the duty amount and therefore, the decision in K.P.Pouches case, supra, has been limited to a situation where the entire excise duty leviable has been paid upfront by the assessee even before issuance of show cause notice. Further, the Court took note of the decision of the Bombay High Court in CCE., Raigad vs. Castrol India Ltd., [2012 (286) ELT 194 (Bom.) , wherein it was held that if the Adjudicating Authority fails to make a reference in its order regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept of knowledge in the provisions of Section 11A of the Central Excise Act, 1944 read with sub-section (1) and the proviso thereto'. 18.Learned counsel for the assessee before us contended that the department had knowledge of the entire matter as early as in December, 2003, when they had made an inspection of the factory. However, show cause notice was issued only in the year 2007 and the extended period could not have been invoked in the instant case. The argument advanced by the learned counsel for the assessee before us is identical to that of the argument which was advanced before the Gujarat High Court in Neminath Fabrics Pvt. Ltd. , supra. The Court repelled the contentions on the following lines: 10. Section 11A of the Central Excise Act, 1944 in so far as the same is relevant for the present purpose reads thus: 11A. Recovery of duties not levied or not paid or shortlevied 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof; (c) in the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund. 11. A plain reading of sub-section (1) of section 11A of the Act indicates that the provision is applicable in a case where any duty of excise has either not been levied/paid or has been short levied/short paid, or wrongly refunded, regardless of the fact that such non levy etc. is on the basis of any approval, acceptance or assessment relating to the rate of duty or valuation under any of the provisions of the Act or Rules thereunder and at that stage it would be open to the Central Excise Officer, in exercise of his discretion to serve the show cause notice on the person chargeable to such duty within one year from the relevant date. 12. The Proviso under the said sub-section stipulates that in case of such non levy, etc. of duty which is by reason of fraud, collusion, or any mis-statement or suppression of facts, or contravention of any provisions of the Act or the rules made thereunder, the provisions of sub-section (1) of section 11A of the Act shall have effect as if the words one year have been substituted by the words five years . 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so cannot be permitted in law when the statute itself has provided for a fixed period of limitation. It is equally well settled that it is not open to the Court while reading a provision to either rewrite the period of limitation or curtail the prescribed period of limitation. 18. The Proviso comes into play only when suppression etc. is established or stands admitted. It would differ from a case where fraud, etc. are merely alleged and are disputed by an assessee. Hence, by no stretch of imagination the concept of knowledge can be read into the provisions because that would tantamount to rendering the defined term relevant date nugatory and such an interpretation is not permissible. 19. The language employed in the proviso to sub-section (1) of section 11A, is clear and unambiguous and makes it abundantly clear that moment there is non-levy or short levy etc. of central excise duty with intention to evade payment of duty for any of the reasons specified thereunder, the proviso would come into operation and the period of limitation would stand extended from one year to five years. This is the only requirement of the provision. Once it is found that the ingredients of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it to the department and the assessee did not obtain registration from the department nor maintained any records and obtained registration under the provisions of the Act only on 16.05.2003. Thus, these facts would clearly establish that the extended period of limitation was invocable in the assessee's case. 21.The further contention raised by the learned counsel for the assessee that excise duty was paid by the assessee in instalments to the tune of about ₹ 11 lakhs between 2003 and 2005 ought to have been considered. We are unable to accept the stand taken by the assessee in this regard, as excise duty is payable on clearance of goods. The assessee, who is required to be registered under the provisions of the Act, is mandatorily required to do so and particularly, if the assessee had collected excise duty, he is bound to remit the duty to the department and cannot retain the same and then contend that due to financial difficulty, he could not remit the same and had remitted a portion of the same in instalments. The factual scenario in the instant case disentitles the assessee for any remedy. 22.Further, it is submitted that the Adjudicating Authority has erroneo ..... 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