TMI Blog2019 (8) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee as these facts were already in the knowledge of the authorities. Under the circumstances, the respondents were not justified in invoking the extended period of limitation in respect of earlier periods by issuing the impugned show cause notices, on the plea of suppression of facts by the appellants, as the facts were already in the knowledge of the Department. The controversy involved in the present petition is no longer res-integra in view of the decision of the Supreme Court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [ 2006 (4) TMI 127 - SUPREME COURT] where it was held that while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. Appeal allowed - decided in favor of appellant. - R/TAX APPEAL NO. 42 of 2019 - - - Dated:- 8-8-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Appellant (s) : MR PARESH M DAVE (260) For The Opponent (s) : MR MITESH R AMIN (2876) ORAL JUDGMENT ( PER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paid by the appellant on the actual price of the ports and components charged and recovered from the customers. 2.03. The case of the Revenue was that excise duty was paid by the appellant on the actual price charged for parts and components from the customers, but no excise duty was paid on the money/price recovered from the customers for selling moulds/dies/patterns. The Revenue therefore proposed to include in the price of parts and components manufactured by the appellant, the income from sales of patterns/moulds. 2.04. However, in the present proceedings, this issue of valuation or the addition of income from patterns sales is not involved. The issue involved in the present Appeal is about invocation of extended period of limitation in raising duty demand on income of selling patterns/moulds. 2.05. On the basis of audit verification of the records of the appellant such as balance-sheets for years 2001-02, 2002- 03 and 2003-04, excise duty of ₹ 3,38,562/- was demanded an income of pattern sales being ₹ 2l,16,0l3/- taken from the balance-sheets. In the the first show cause notice issued on 25.7.2005 for the above pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribunal further held that all relevant facts were in knowledge of the authorities when first show cause notice was issued and therefore, there was no suppression of facts on part of the assesee. The tribunal ultimately held that the demand of duty for extended period of limitation cannot be sustained. The tribunal also made reference to the balance-sheet. 2.10. From the above, it is clear that the proceedings initiated by way of first, second and third show cause notices stand concluded in the favour of the appellant on the issue of time bar, i.e. limitation in raising demand of duty. The Tribunal has held that invocation of extended period of limitation cannot be sustained because all relevant facts were in knowledge of the authorities when first show cause notice was issued, and there was no suppression of facts on part of the assessee. 2.11. The impugned proceedings : 2.11.1. Fourth show cause notice was issued on 22.10.2007 on the same basis i.e. audit verification of the balance-sheet and |edgers of the appellant, and duty demand on income from sales of patterns involving years 2004-2005 and 2005-2006 (upto February, 2006) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice was issued for the normal period of limitation and thereafter a subsequent show cause notice was issued invoking larger period of limitation and in such factual background, the Supreme Court has held that the subsequent show cause notice and invocation of larger period of limitation thereunder were impermissible. The ratio and the principle of law laid down by the Supreme Court is that once show cause notice proceedings were initiated against an assessee for a particular cause or a particular subject matter, then it meant that the Revenue was aware about such cause of dispute and therefore the Revenue was not authorized to subsequently issue another show cause notice for larger period of limitation involving the same cause of dispute. 4.02. Mr.Paresh Dave, learned counsel appearing for the appellants further submitted that this Court applied the principle flowing from the judgement of Nizam Sugar Factory (supra) in case of Gujarat Ambuja Exports Ltd. Versus UOI 2011 (269) ELT 159 (Guj.) where the factual position was absolutely similar to the present case. In Gujarat Ambuja Exports Ltd. six show cause notices were issued to the assessee coveri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity in issuing the impugned order. He has contended that the respondent authority has power, authority and jurisdiction to issue such notice. 5.02. Mr.Amin, further contended that there was new material and there was statement of Mr.D.T. Soni. Therefore, it cannot be said that the impugned notice is issued on the same facts. It is contended that the respondent department has established that there was suppression of the fact and misdeclaration on the part of the appellant. It is contended that until the balance-sheet is filed by the appellant, the respondent department had no source to know that there was suppression by the appellant. 5.03. Mr.Amin, further contended that the tribunal has rightly held that the decision of Nizam Sugar Factory is not applicable to the facts of the case on hand. It is contended that in previously show cause notices were issued for the subsequent period and therefore, the tribunal set aside the same relying on the decision of the Supreme Court in the case of Nizam Sugar Factory, however, the impugned notices are issued for the previous period and not for the subsequent period and therefore, the decision of the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty bound to disclose such information, it would not be a case of suppression of facts as held by the Supreme Court in the well-known cases of Padmini Products and Chemphar Drugs Liniments reported in 1989 (43) ELT 195 (SC) and 1989 (40) ELT 276 (SC), respectively. 6.01. What is suppression has been considered by the Supreme Court in the case of Continental Foundation Jt. Venture V/s CCE. Chandigarh reported in 2007 (216) ELT 177 (SC), and it is held by the Hon'ble Supreme court with regard to the proviso to Section 11A of the Central Excise Act. 1944, that mere omission to give correct information was not suppression of facts unless it was deliberate and to stop the payment of duty. In the previous case like Messrs Jaiprakash Industries Ltd. reported in 2002 (146) EU 481 (SC) also, the Supreme Court has held that a bonaflde doubt as to nondutiablility of goods was sufficient for the assessee to challenge the demand on the point of Imitation. However. mere failure in giving correct information would not be a case where the Revenue can invoke extended period of limitation. 6.02. The issue involved in the present Appeal is about in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. 14 (SC) has taken the view that in a case in which a show cause notice has been issued for the earlier period on certain set of facts, then, on the same set of facts another SCN based on the same/similar set of facts invoking the extended period of limitation on the plea of suppression of facts by the assessee cannot be issued as the facts were already in the knowledge of the department. It was observed in para 14 as follows : 14. We have indicated above the facts which make it clear that the question whether M/s. Pharmachem Distributors was a related person has been the subject-matter of consideration of the Excise authorities at different stages, when the classification was filed. when the first show cause notice was issued in 1985 and also at the stage when the second and the third show cause notices were issued in 1988. At all these stages, the necessary material was before the authorities. They had then taken the view that M/s. Pharmachem Distributors was not a related person. If the authorities came to the conclusion subsequently that it was a related person, the same fact could not be treated as a suppression of fact on the part of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice was not relevant and was not applicable. The Department has not brought any of those facts on record. Therefore, the Department cannot now urge that findings of the Collector that that Show Cause Notice was on a similar issue and for an identical amount is not correct. 9. Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later-on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. We agree with the view taken in the aforesaid judgments and respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellant. 10. For the reasons stated above, Civil Appeal Nos. 2747 of 2001 and Civil Appeal No. 6261 of 2003 tiled by the assessees are accepted and the impugned orders are set aside on the question of limitation only. The demands raised against them as well as the penalty, if any, are dropped. Civil Appeals @ Special L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. In the circumstances, the respondents were not justified in invoking the extended period of limitation in respect of earlier periods by issuing the impugned show cause notices, on the plea of suppression of facts by the petitioners, as the facts were already in the knowledge of the Department. 17. For the foregoing reasons, the petition succeeds and is, accordingly, allowed. The impugned show cause notices F.No.V.15/15- 60/OA/2002 and F.No.V.15/15-61/OA/2002, both dated 2.7.2002 (Annexure E collectively) are hereby quashed and set aside. Rule is made absolute accordingly with no order as to costs. 6.07. It is pertinent to note that in the case of the appellants, all the show cause notices were issued on basis of audit verification of balance sheets only and therefore there was no suppression in respect of demand raised in fourth and fifth show cause notices. Thus, the basis on which the impugned order is passed is not only illegal, but is also contrary to the final decisions rendered by the Tribunal in previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the same and/or similar set of facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. Under the circumstances, the respondents were not justified in invoking the extended period of limitation in respect of earlier periods by issuing the impugned show cause notices, on the plea of suppression of facts by the appellants, as the facts were already in the knowledge of the Department. 6.09. The decision of this Court in the case of Gujarat Ambuja Exports Ltd. (supra) is complete answer to the contentions raised by Mr.Amin, learned Government Pleader appearing for the revenue. In the case of Gujarat Ambuja Exports Ltd. also there were statements recorded. However, this Court following the decision of the Supreme Court in the case of Nizam Sugar Factory (supra), quashed and set aside the notices, similar to the present case. Therefore, there is no substance in any of the submissions of the revenue more particularly that there is statement of Mr.D.T. Soni and same is new fact and evidence. 7.00. In view of the above and for the reasons stated hereinabove, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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