TMI Blog2019 (4) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Belapur, holding as follows: 1. The product tanker trailer should be classified under sub heading 87163100 of the CETA 85 and the Waste and Scrap of iron and steel generated should be classified under subheading 72044900/72042190 of the CETA 85. 2. I confirm the Central Excise duty of ₹ 28,47,871 [₹ 27,85,660 (Basic) + ₹ 55,713 (Ed Cess)] (Rupees Twenty Eight Lakhs Forty Seven Thousand Eight Hundred and Seventy One) under the provision of Section 11A(2) of the CEA 44 and the same is recoverable from M/s TF. 3. Interest at Appropriate rate should also be recovered under the provision of of Section 11AB of the Central Excise Act, 1944. 4. I impose a penalty of ₹ 28,47,871 (Rupees Twenty Eight Lakhs Forty Seven Thousand Eight Hundred and Seventy One) under the provision of Section 11AC) of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. 2.0 Demand has been confirmed against the Appellant after denying him the benefit of Small Scale Exemption Notification No 8/2003-CE dated 1.03.2003 on the ground that the appellants aggregate value of clearances crossed the limit prescribed by the said noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been settled by the Apex Court in case of Ujjagar Prints. It is duty of the person claiming exemption to satisfy himself that benefit of exemption is available to him, such person cannot claim ignorance of law/ conditions of notifications as possible defence. Thus he argued that extended period of limitation in the present case has been correctly invoked. 4.1 We have heard both, Counsel for the Appellants and Authorized Representative for the revenue. Since Counsel for the appellants have specifically stated that he was only arguing vis a vis the limitation and not pressing any other ground taken in appeal we are deciding the matter only on the ground of limitation. 4.2 On the issue of Limitation learned Adjudicating Authority has recorded as follows in his order- 4.2 M/s TF in the declaration filed had not considered the cost of raw material and chassis supplied free of cost by their buyer despite the decision of the Hon ble Supreme Court in case of Ujjagar Print. Though, M/s TF was under a bonafide belief that the cost of chassis should not be added in the assessable value of the gods, but it was seen that M/ T received the raw material from their buyer free of cost f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se laws referred are also not applicable in the present case. 16. The appellants also contended that at no time did the Excise department informed the appellants or even enquire as to whether the appellants had considered the value of tanker including the chassis of motor vehicle whilst calculating the aggregate value of all clearances during any Financial year, Hence extended period is not invokable. In this connection, as discussed above, the onus is on the assessee for eligibility for the notification. As the appellants had suppressed the correct value in the declaration filed, provisions of extended period is invokable and penalty is impossible. 4.4 We do not find any merit in the submission of the appellants with regards to filing of declaration. We have perused the declarations filed by the appellant and filed that appellants were declaring the value of goods cleared by availing the benefit of exemption. The said declarations are reproduced below: 4.5 Thus it is fact that appellants were fully aware of their responsibilities an liabilities in terms of Notification No 8/2003-CE dated 01.03.2003. However while making the said declara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.7 In case of RPG Enterprises [2008 (STR) (T-Mum)] it has been held- 15. The Appellants contention that in view of the solicitor s opinion in 1989, which was not disputed by the Auditors or the Registrar of Companies, they entertained a bona fide belief that they are not liable to service tax, does not appear to be convincing. Bona fide belief is not blind belief. The ratio of the various case laws cited by the learned Jt. C.D.R.. as referred to in para 6.4(iii) above for invoking extended period are rightly applicable to the facts and circumstances of the present case. The appellants suppressed the vital information from the Department with intent to evade payment of Service Tax. We uphold the order of the Commissioner (Appeals) confirming the demand of Service Tax together with interest. 4.8 Similar view has been expressed by the Tribunal in following cases: a. Winner Systems [2005 (191) ELT 1051 (T)] 5 . The second contention of the appellants is that while computing the demand the department has taken the value of the computer resold by them after procuring them from various vendors. We examined this contention. The Commissioner in his order examined the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses were under the Central Excise Act and there was material on the record to suggest therein that there was no suppression of the true facts by the assessee from the department. But such is not the position in this case. c. Interscape [2006 (198) ELT 2515 (T) 8. Having examined the rival contentions on this issue of penalty, we observe that the bona fide belief is not blind belief. A belief can be said to be bona fide only when it is formed after all the reasonable considerations are taken into account. The appellants plea, viewed in this light that they entertained bona fide cannot sustain. 4.9 The tribunal has in case of L OREAL India Pvt Ltd Vs Commissioner of Central Excise Pune [2015 (330) ELT 253 (T-MUM)] has held- 5.11 Reliance is placed on the decision of the Hon ble Gujarat High Court in the case of Neminath Fabrics Pvt. Ltd. [2011-TIOL-10-HC-AHM-CX = 2010 (256) E.L.T. 369 (Guj.)] and the Larger Bench decision in Union Quality Plastic Ltd. [2013-TIOL-1072-CESTAT-AHM-LB = 2013 (294) E.L.T. 222 (Tri.-LB)] wherein it has been held that knowledge and awareness of the department is not a relevant factor for invocation of extended period of time. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or computing the total clearance of ₹ 4/- crores in terms of the Small Scale Exemption Notification No.8/02. However the said Notification No.8/02 was amended vide Notification No.8/03 dated 01/03/2003 as a result of which the value of exempted goods cleared by small scale manufacturer was required to be included for calculating the aggregate value of clearances for the purposes of the benefit of Small Scale Exemption. As such the value of the Tanker was required to be included for computing the said value of ₹ 4/- crores clearances for the purposes of examining the applicability of Small Scale Exemption Notification to the textile machinery being manufactured by the appellant. 3. The appellant, however continued to avail the benefit of the Small Scale Exemption Notification No.8/03 for the period after 01/03/2003. As the said Notification required the appellant to file declaration with their Jurisdictional Central Excise Authorities, they filed the same on annual basis, disclosing the clearances value of the Tankers being manufactured by them. The said declarations are on record and stand included as a part of the order proposed by learned Member Technical. 4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to them. In the absence of any evidence to the contrary produced by the Revenue, the invocation of extended period would not be justified. Learned advocate has also referred to the finding of bona fide belief by the Adjudicating Authority himself and has submitted that in such circumstances, it was not open to the Revenue to invoke the longer period. 6. I find that the extended period in terms of the provisions of Section 11A of the Central Excise Act can only be invoked when the duty has not been paid on account of fraud, collusion, willful misstatement, suppression of facts or contravention of any of the provisions of the act or the rules made thereunder with intent to evade payment of duty, the period of five years is available to the Revenue to serve notice on such person for such short paid duty. The said expression appearing in Section 11A has been the subject matter of various decisions of the Supreme Court. Reference can be made to the Hon ble Supreme Court decision in the case of Collector of Central Excise vs. Chemphar Drugs reported as 1989 (40) E.L.T. 276 (S.C.). It stands held that extended period of five years is applicable only when something positive other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tanks on the same and no work is undertaken by the appellant s on the said Chassis. In such a scenario, the applicability of the said decision to the facts of the present case is also doubtful though learned advocate appearing for the appellants have not advanced their case on the said issue. In any case, we have to keep in mind that the Tankers were free from payment of duty of Excise. As such an assessee, who is not an excise expert, cannot be expected to apply the ratio of said decision of the Hon ble Supreme Court to a situation, which is on together different premises and to conclude that even for the purposes of computing the aggregate value of clearances of Rs. four crores, in terms of the Small Scale Exemption Notification, the said ratio of law declared by the Hon ble Supreme Court is to be followed. As already observed the appellant had been filing the declaration for the period pre as well as post amendment adopting only the value of the Tanks fabricated by them. Revenue was well aware of the amendment in the law and on filing of declaration by the assessee, never raised any objection or any question to the assessee as to whether the value of the Chassis stands include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, the imposition of penalty upon is not called for. The same, accordingly, is set aside and appeal is allowed in above terms. (Archana Wadhwa) Member (Judicial) Point of Difference Whether the appeal is to be rejected as held by learned Member (Technical) upholding the entire duty and interest as also penalty imposed upon them. Or Major part of the demand has to be set aside alongwith setting aside of total penalty on the issue of time bar and a small part of the demand of ₹ 1,41,345/- falling within the limitation, has to be confirmed alongwith confirmation of interest. The above difference is placed before the Hon ble President for reference to third Member. (Pronounced in Court on 18.03.2019) Per: Dr. D.M. Misra Heard both sides. 2. The present case has been referred by Hon ble President on account of difference of opinion between Hon ble Member (Judicial) and Hon ble Member (Technical) on the issue whether the demand of duty be restricted to the normal period as held by Hon ble Member (Judicial) or the demand of duty, interest and penalty be confirmed invoking extended period of limitation as held by Hon ble Member (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors. 1988 (38) ELT 535 (SC) cannot be strictly applicable to the facts of the present case and alternatively, the Appellant was not aware of the said principle and allegation of suppression, mis-declaration in the present circumstances of the case, therefore, cannot be invoked. Hence, the demand is barred by limitation. 5. Per contra, the learned A.R. for the Revenue has argued that the Appellants had continuously filed declarations for the period 2004-05 to 2008-09 without disclosing the facts that they were doing job work on the supplied raw material and chassis free of cost by the supplier. In the declaration, they have simply indicated the total value of the clearances of finished goods without indicating that the value of free issue material received and used in the manufacture of Tankers during the financial year. He submits that in their reply to the Show Cause Notice, they have disputed inclusion of value of free issue material and that of chassis in the value of tankers, submitting that since they were not involved only in the fabrication of the tankers and not manufacturing chassis, therefore, the value of chassis cannot be added to the value of job work charges. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted earlier and till financial year 2008-09 the value of free issue material and chassis were not disclosed to the Department in the declaration which formed a part of the value of the tanker fabricated by them and cleared at Nil rate of duty, availing the said SSI exemption Notification 08/2003-CE, dt.01.03.2003. Also, the relevant provision of Central Excise Valuation Rules, 2000 has been amended from 01.03.2003 under which the value of free issue material prescribed to be includible in the value of excisable goods determined under Section 4 of Central Excise Act, 1944. Hence, in my opinion, there is no basis for having a bonafide belief on the position of law as claimed by the Appellant. 7. Under these circumstances, I agree with the observation of Hon ble Member (Technical) that in claiming SSI Notification No.08/2003-CE, dt.01.03.2003, the Appellant had suppressed the correct aggregate value of the clearances of the tankers during the relevant period by not disclosing the fact of receipt of free issue material and chassis from the customer in the respective declaration and also by not including their value while computing the aggregate value of the clearances for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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