TMI Blog2023 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is to be exercised to remove the error and to disturb the finality - If non-consideration of a decision of the High Court or the Supreme Court can be said to be a mistake apparent from the record‟, there can be no doubt that non-consideration of two important submissions which were advanced at the time of hearing of the appeal would constitute a mistake apparent from the record which would require rectification. Invocation of extended period of limitation - HELD THAT:- It would be seen that the ER-III/ER-I returns filed by the applicant clearly show that the applicant had categorically declared that it had cleared the final products by availing the exemption under the notification dated 17.03.2012. The applicant had furnished the returns on the basis of self assessment. Even in a case of self-assessment, the Department can always call upon an assessee and seek information. It is under sub-rule (1) of rule 6 of the Central Excise Rules, 2002 [the 2002 Rules] that the assessee is expected to self assess the duty and sub-rule (3) of rule 12 of the 2002 Rules provides that the proper officer may, on the basis of information contained in the return filed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods in the manufacture of final products. The remaining part of the demand confirmed by the Principal Commissioner in the order dated 15.07.2019 is confirmed. The appeal is, accordingly, allowed to the extent indicated above. The matter is remitted to the Principal Commissioner to re-determine the duty demand in the light of the observations made above. Application disposed off. - Excise Rectification of Mistake Application No. 50621 of 2022 Excise Appeal No. 52480 of 2019 - MISCELLANEOUS ORDER NO. 50650/2022 - Dated:- 19-12-2022 - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri B.L. Narasimhan Shri Dhruv Tiwari, Advocate for the Appellant Shri Sanjay Kumar Singh, Authorized Representative of the Department ORDER This application has been filed by the appellant for rectification of mistakes in the final order dated 22.04.2022 of the Tribunal. 2. It has been stated that the submission made on behalf of the appellant at the time of hearing of the appeal and also contained in the written synopsis filed by the appellant that the extended period of limitation contemplated under section 11A (4) of the Central Excise Act, 1944 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. 6. A bare perusal of the aforesaid sub-section (2) of section 35C(2) of the Excise Act indicates that the Appellate Tribunal may, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1). Sub-section (1) provides that the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision for a fresh adjudication. What is, therefore, necessary for a mistake to be rectified is that it must be apparent from the record. 7. The issue, therefore, that arises for consideration is whether non-consideration of the contentions relevant to the issue for determination which were raised before Bench of the Tribunal, can be said to be mistakes apparent from the record so as to be rectified under section 35C(2) of the Excise Act. 8. In Asstt. Commr., Income Tax, Rajkot vs Saurashtra Kutch Stock Exchange Ltd. [200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court or the Supreme Court can be said to be a mistake apparent from the record‟, there can be no doubt that non-consideration of two important submissions which were advanced at the time of hearing of the appeal would constitute a mistake apparent from the record which would require rectification. 10. It will, therefore, be necessary to examine the two contentions that had been raised at the time of hearing of the appeal. Extended Period of Limitation 11. Section 11A of the Excise Act deals with recovery of duties not levied or not paid or short levied or short paid or erroneously refunded is reproduced below:- Section 11A. Recovery of duties not levied or not paid or short levied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within two years from the relevant date, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment invoked extended period of limitation of five years as according to it the duty was shortlevied due to suppression of the fact that if the turnover was clubbed then it exceeded Rupees Five lakhs. ******** 4. A perusal of the proviso indicates that it has been used in company of such strong works as fraud, collusion or willful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. (emphasis supplied) 15. This decision of the Supreme Court in Pushpam Pharmaceuticals was followed by the Supreme Court in Anand Nishikawa Co. Ltd. vs. Commissioner of Central Excise, Meerut [(2005) 7 SCC 749] and the relevant paragraph is as follows:- 27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or wilful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso. (emphasis supplied) 18. The Supreme Court in Continental Foundation Joint Venture vs. Commissioner of Central Excise, Chandigarh [ 2007 (216) ELT 177 (SC) ] also observed in connection with section 11A(4) of the Excise Act, that suppression means failure to disclose full information with intention to evade payment of duty and the observations are as follows:- 10. The expression suppression has been used in the proviso to Section 11A of the Act accompanied by very strong words as fraud‟ or collusion and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012-CE dated 17.03.2012 vide Sl. No. 332 in the Table mentioned therein during the period from 01.04.2013 to 10.07.2014. 14. xxxxxxxxx Further, the assessee also violated the provisions of Rule 6 of the Central Excise Rules, 2002, in as much as they removed the goods without proper and correct-self-assessment and violated the provisions of Rule 4 and 8 of the Central Excise Rules, 2002 in as much as they cleared the goods without payment of duty, without establishing their entitlement for exemption in terms of Notification No.:12/2012-CE dated 17.03.2012 as amended vide Notification No.:12/2014-CE dated 11.07.2014 (Sl. No. 332/ 332A of the table). Thus the assessee had deliberately cleared the goods at 'nil' rate of duty under Notification No.:12/2012-CE dated 17.03.2012, as amended, with intent to evade payment of Central Excise duty though there was no ground for confusion on eligibility aspect of the said Notification. xxxxxxx 21. In reply to the show cause notice, the appellant clearly stated that the appellant was under a bonafide belief that it was entitled to seek exemption under the notification dated 17.03.2012, as according to the appellant mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bricated buildings of Heading 9406 and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frame work, doors and windows and their frames and thresholds for Doo 12/2012-CE 332 0 July- September ,15 73084000 Structures (Excluding prefabricated buildings of Heading 9406 and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frame work, doors and windows and their frames and thresholds for Doo 12/2012-CE 332 0 October-December, 15 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 January-March,16 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 April,16 73089040 Solar Mounting structures us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 May,17 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 June,17 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 22. It is for this reason that the appellant contended in the reply that the Department was aware that appellant, which was manufacturing module mounting structure used for solar power generating system, had availed exemption under notification dated 17.03.2012 at S. No. 332 and cleared the goods at NIL rate of duty and so there was no suppression. The appellant also pointed out that suppression has to be with an intent to evade payment of duty. 23. The Commissioner, in the impugned order dated 15.07.2019, examined the issue of limitation in the following manner: 5.11.4 On scrutiny of the relevant ER-1 Returns, I observe that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the assessee, but that was not done. It is, therefore, not possible to accept the contention of the learned authorized representative appearing for the Department that the appellant should have filed a proper assessment return under rule 6 of the Rules. 25. Departmental instructions to officers also emphasise upon the duty of officers to scrutinize the returns. The instructions issued by the Central Board of Excise Customs [CBEC] on December 24, 2008 deal with duties, functions and responsibilities of Range Officers and Sector Officers . It has a table enumerating the duties, functions and responsibilities and the relevant portion of the table is reproduced below: LIST OF DUTIES, FUNCTIONS AND RESPO NSIBILITES OF RANGE OFFICER AND SECTOR OFFICER SCRUTINY OF RETURNS S. No. Subject Sector officer s duties Range officer s duties 2.1 Scrutiny of ER-1/ER- 2/ER-3 Returns To ensure that these returns are entered in database. To carry out preliminary scrutiny of ER-1/ER-2/ER-3 Returns within a fortnight of receipt subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inse the correctness of assessment. 2.4 The Additional/Joint Commissioner of Central Excise will scrutinize the returns of the units which pay duty of Rs. 5 crores or more from PLA per annum every six months. They shall requisition all connected documents including invoices and the records and scrutinize the correctness of assessment. (emphasis supplied) 27. It is thus evident that not only do the 2002 Rules mandate officers to scrutinise the Returns to verify the correctness of self assessment and empower the officers to call for documents and records for the purpose, Instructions issued by the department also specifically require officers at various levels to do so. 28. Thus, the finding in the order of the Commissioner that the applicant had deliberately filed incorrect returns as a result of which the extended period of limitation could be invoked cannot be sustained. The Department was aware of the material facts, more particularly when the availment of exemption benefit under notification dated 17.03.2012, had been categorically declared by the applicant in the excise returns. 29. Learned counsel for the applicant also submitted that the fact of availmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, also be sustained. APPLICANT IS ENTITLED TO AVAIL CENVAT CREDIT 33. The contention of learned counsel for the applicant is that the applicant would be entitled to avail CENVAT credit of duty paid on the inputs, input services and capital goods used in the manufacture of final products, amounting to Rs. 2,09,66,878/- in terms of the provisions of the CENVAT Credit Rules, 2004 [2004 Credit Rules] 34. This submission of learned counsel for the applicant deserves to be accepted as it is a settled position of the law that if duty is held payable on the final product, then the assessee is entitled to credit paid on inputs, input services and capital goods. In this connection, reference can be made to the decision of the Supreme Court in Siddhartha Tubes Ltd. v/s Commissioner of Central Excise, Indore (M.P.) [2006 (193) E.L.T. 3 (S.C.)]. 35. Thus, paragraph 23 of the final order dated 22.04.2022 passed by the Tribunal shall stand deleted and shall be replaced by the following paragraph:- The impugned order dated 15.07.2019 passed by the Principal Commissioner is modified to the extent that the duty demand confirmed for the extended period of limitation i.e. for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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