TMI Blog2019 (7) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... or invoking the extended time proviso - the charges of willful suppression or mis-statement of facts cannot be invoked The SCN is barred by limitation - appeal allowed - decided in favor of appellant. - Excise Tax Appeal No. 50379/2017 - FINAL ORDER NO. 50769/2019 - Dated:- 1-2-2019 - MR. JUSTICE DILIP GUPTA, PRESIDENT And MR. C L MAHAR, MEMBER (TECHNICAL) Shri Anandodaya Mishra, Advocate for the Appellant Shri P Juneja, Authorized Representative for the Respondent ORDER PER C L MAHAR : The brief facts of the matter are that the original appeal No. E/50379/2017-DB was filed against the Order in Appeal No. BHO-EXCUS-001-APP-450-16-17 dated 18 November, 2016 of learned Commissioner (Appeals). The appeal had been decided vide Final Order No. 50258/2018 dated 19 January, 2018 by this Tribunal. This Tribunal vide its above mentioned Final Order had decided the matter against the appellant, relevant extract of the Final Order is reproduced below: 6. The transaction between the appellant and M/s Zydus are governed by the agreement termed as Manufacturing Agreement . The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture and sale of goods. In the present case, from the price agreed between two parties it is obvious that various elements of cost which clearly are required to be included in the selling price of manufactured product have not been included. In the present case, for example, the goods are to be manufactured using the technology, standard and technical knowhow relating to the product which will be supplied by M/s Zydus. But such elements of cost have escaped the agreed price between the appellant and M/s Zydus. 11. Once we conclude that the appellant has acted as a job worker for M/s Zydus the mischief of Rule 10A of the Valuation Rules becomes applicable and the goods are required to the valued on the basis of the price at which the principal manufacturer, M/s Zydus sells such goods from their depot. 12. In view of above discussion, we are inclined to uphold the findings of the lower authorities which are on the above lines. 2. Thus, the appeal of the appellant was dismissed holding that the appellant needs to discharge the Central Excise duty on the value on which the goods were actually sold by the principal manufacturer namely M/s. Z ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m and M/s. Zydus Wellness Ltd. is a commercial transaction which does not involve any job work. It is in the nature of pure sale and purchase on principal to principal basis between two parties i.e. between the appellant and M/s. Zydus Wellness Ltd. It is contended that M/s. Zydus Wellness Ltd. has not paid any other price or consideration other than the price of goods which have been charged by them from M/s. Zydus Wellness Ltd. on Central Excise invoice raised by them. The learned advocate has further taken shelter of various decisions including that of Hon‟ble Apex Court on the issue to support his case. The summary of certain decisions as submitted by learned advocate is reproduced hereinbelow:- (i) The Central Board of Excise and Customs vide Circular No. 268/102/96-CX, dated 14.11.1996 has clearly directed that ingredients of suppression of facts, willful mis-statement etc. have to be clearly substantiated, as laid down by the Hon‟ble Supreme Court in the case of CCE, vs. HMM Ltd. reported in [1995 (76) ELT 497 (SC)] for invoking extended time period for demand of Central Excise duty. (ii) The Hon‟ble Supreme Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23; preceding the words, mis-statement or suppression of facts , which means with intent to evade duty. The next set of words, contravention of any of the provisions of this Act or Rules‟, are again qualified by the immediately following words, with intent to evade payment of duty. (vi) If, all the facts are within the knowledge of Department, extended period of limitation, is not available as held by Honourable Apex Court, in case of Nizam Sugar Factory versus CCE, reported in [2006 (197) ELT 465 (SC)], enclosed marked as Annexure:18, hereto. The Central Board of Excise Customs, vide Circular No.5/92-CX-4, dated 13.10.1992 (Annexure:19, hereto), has clarified that mere non-declaration, is not sufficient, for invoking longer period of limitation. Non payment of Excise duty, on waste and scrap of cables, is also due to the judgements, delivered by the Hon‟ble Tribunals and Supreme Court, on the same subject and it cannot be said that these judgements and legal position, are not in the knowledge of the Department. It is therefore, respectfully submitted that the Show Cause Notice, is barred by limitation, as ingredients for invoking ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order-in-Appeal has not commented anything on the ground of limitation that the appellant has contested before him during personal hearing as well as vide their written submissions dated 20 July, 2015. We find that for invoking the extended period of limitation under section 11A(4) of Central Excise Act, 1944 one of the following ingredients need to be present in the activities of the assessee i.e. (a) fraud; (b) collusion; (c) willful mis-statement; or (d) suppression of facts or contravention of any of the provisions of this Act or rulings made thereunder with intent to evade payment of duty. We find that the appellants have been filing their ER 1 return regularly before the Department and declaring the price which have been charged by them from M/s. Zydus Wellness Ltd., on the invoices and the price on which the Central Excise duty has been paid. The Department has not challenged the authenticity, genuineness of such invoices neither they have proved that the appellants have received any other consideration other than the price which is indicated on the invoices for clearance of excisable goods. We feel that the ingredients which are the pre-requisite for invoking the extended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for entertaining doubt, and taking a particular stand which rules out application of Section 11A of the Act. 12. As far as fraud and collusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word wilful‟, preceding the words mis-statement or suppression of facts which means with intent to evade duty. The next set of words contravention of any of the provisions of this Act or Rules‟ are again qualified by the immediately following words with intent to evade payment of duty.‟ Therefore, there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful. 2. Cosmic Dye Chemical vs CCE, Bombay [1995 (75) ELT 721 (SC)] wherein it has been held as under: 6. Now so far as fraud and collusion are concerned, it is evident that the requisite intent, i.e., intent to evade duty is built into these very words. So far as mis-statement or suppression of facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 11-A(1) it must be alleged in the show-cause notice that the duty of excise had not been levied or paid by reason of fraud, collusion or willful misstatement or suppression of fact on the part of the assessee or by reason of contravention of any of the provisions of the Act or of the Rules made thereunder with intent to evade payment of duties by such person or his agent. There is no such averment to be found in the show cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had been practiced or that the assessee was guilty of wilful misstatement or suppression of fact. In the absence of any such averments in the show-cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11-A(1) of the Act. It was held that the show cause notice must put the assessee to notice which of the various omissions or commissions stated in the proviso is committed to extend the period from six months to five years. That unless the assessee is put to notice the assessee would have no opportunity to meet the case of the Department. It was held : ... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts referred to hereinbefore do not warrant any inference of fraud. The assessee declared the goods on the basis of their belief of the interpretation of the provisions of the law that the exempted goods were not required to be included and these did not include the value of the exempted goods which they manufactured at the relevant time. The Tribunal found that the explanation was plausible, and also noted that the Department had full knowledge of the facts about manufacture of all the goods manufactured by the respondent when the declaration was filed by the respondent. The respondent did not include the value of the product other than those falling under Tariff Item 14E manufactured by the respondent and this was in the knowledge, according to the Tribunal, of the authorities. These findings of the Tribunal have not been challenged before us or before the Tribunal itself as being based on no evidence. 9. In that view ..... 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