TMI Blog2000 (7) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... Referral Order had noted that there was a conflict of views between different Benches of this Tribunal on the question raised before the Bench, viz., that in a case where the Department alleges intention to evade payment of duty, whether it was sufficient if the assessee shows that he had an alternative procedure available to him which, if followed, would have allowed him the benefit of set off or Modvat credit, thus making the alleged short levy/non-levy of duty, Revenue-neutral and whether that would be sufficient ground for establishing that there was no intention to evade duty. 3.On behalf of the assessee it had been argued that there was a catena of decisions of the Tribunal (mentioned in Para 3 of the Referral Order) supporting the contention that no intention to evade payment of duty can be attributed to an assessee where the situation results in Revenue-neutrality. As against this there was a decision of another coordinate Bench of the Tribunal in the case of M/s. International Auto Products (P) Ltd. v. CCE [1999 (35) RLT 58 (CEGAT)] holding that the plea of Revenue neutrality will not be sufficient to hold that there was no intention to evade duty. 4.We have heard exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcess of price indicated in the invoice and they had paid the duty on the price indicated in the invoice. It is further argued that the appellants cannot be accused of intention to evade payment of duty since the entire duty paid by the appellants would be available to MUL as Modvat credit and in fact the differential duty paid by the appellants had been availed of as Modvat credit by MUL. Ld. Counsel has contended that a string of decisions given by the Courts and Tribunal has clearly established that in cases where the duty demanded was available as Modvat credit and the net result was Revenue-neutral then there cannot be any intention to evade payment of duty. It was further argued that to establish intention to evade payment of duty under proviso to Section 11A(1), it was necessary to show that the assessee was aware that duty was leviable and it still deliberately avoided paying it, as was held in the Apex Court judgment in Tamilnadu Housing Board v. CCE Madras [1994 (74) E.L.T. 9 (S.C)]. In a case where there was scope for doubt about the liability to pay duty, the proviso to Section 11A(1) will not be attracted, as was held in the case of M/s. Padmini Products [1989 (43) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y complying with the provisions of Rule 56A even at a later stage. Ld. Counsel contended that since the appellants had in the instant case entertained the bona fide belief that it was not necessary to include the cost of the components supplied free of cost by MUL and had later on debited the differential amount without demur, invokation of penalty provisions under Section 11AC was uncalled for. 7. As regards the raising of demand under Section 11A(1) and the issuance of SCN, ld. Counsel contended that the appellants had debited the differential duty of Rs. 55,91,225/- well before the issuance of SCN, and as such there existed no non-levy/short levy or non-payment, short payment of duty on the date of issue of the SCN. There was therefore no question of determination of the amount payable by the assessee under Section 11A(2). On the question of imposition of penalty under Section 11AC, it was submitted that an equal amount becomes payable by the assessee as penalty only when the amount of duty liable to be paid by the assessee is determined under Section 11A(2). Further, the ingredients of Section 11AC were identical with that of proviso to Section 11A(1). Therefore, if no wilful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. 7. Indian Rayon Industries Ltd. v. CCE - 2000 (119) E.L.T. 636 (Tribunal) = 2000 (37) RLT 154 8. Mahindra Mahindra Ltd. v. CCE - 2000 (37) RLT 37 9. CCE v. M/s. Allied Industries - Final Order No. 191/2000-A dated 28-3-2000. 10. R.H. Industries v. CCE, Chandigarh CCE, Chandigarah v. A.T. Engg. Works - 2000 (36) RLT 848 (CEGAT) 11. Essel Packaging Ltd. v. CCE, Mumbai-III - 2000 (117) E.L.T. 466 (Tri.) 12. Vorion Chemicals Distilleries Ltd. v. CCE - 1999 (31) RLT 93 (CEGAT) 10.Shri Sanjeev Srivastava, ld. JDR contended that the first issue to be considered was whether the cost of components received by the appellants free of cost from MUL and used by them in the manufacture of the final products supplied to MUL should be included in the assessable value of the appellants' final products. In terms of Section 4(1)(a) of the Central Excise Act, the assessable value of the final product on which excise duty is to be paid at the time of removal shall be based on the cost of raw material, incidental charges, taxes, freight and the element of profit. In the case of appellants, it was not in dispute that they had received free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption Notification No. 214/86 and thereby clear the goods without payment of duty and therefore there cannot be a charge of intention to evade duty, ld. JDR submitted that the appellants were admittedly availing the facility of modvat credit under Rules 57A and 57Q at the relevant time and therefore there was no question of their simultaneously availing the benefit of Notfn. No. 214/86. Further, in the absence of any evidence to show that MUL had given an undertaking in terms of Para 2 of the said notification the said plea was merely hypothetical and not based on facts. As regards the Tribunal decisions relied on by the appellants holding that where there was an alternate option available to the assessee enabling them to clear the goods duty free by virtue of exemption notifications or availability of Modvat credit on the duty paid, resulting in a Revenue-neutral position ld. JDR pointed out that in none of the cases cited the assessee had taken credit which remained with the assessee for utilising it towards payment of duty on their various other finished products. He submitted that the cases relied upon by the Counsel for the appellants were therefore not applicable to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of Section 11A(1) does not allow such a construction to be put on the said provision. Inasmuch as Section 11A(1) gives power to the Central Excise Officer to serve a notice within a period of six months from the 'relevant date' from the date when non-levy/non-payment or short levy/short payment has occurred, we are of the view that so long as it is not in doubt that there has been an occurrance of non-levy/short levy/ or non-payment/short payment on the relevant date the pre-conditions for issuance of SCN under Section 11A(1) are fully met and notice validly issued. In the instant case there is no dispute that clearance of excisable goods on short payment of duty had taken place. The fact that the differential duty was subsequently debited (albeit voluntarily) by the assessee before the issue of SCN will not debar the issuance of SCN in relation to the short payment occurring on the relevant date. Further, to the extent the appellants had stated in their price list declaration that no extra consideration had been received from the suppliers of the components despite the known fact that the said components were received free of cost, the allegation of suppression of facts in term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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