TMI Blog2001 (7) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... Act; that one of the such deduction is Turn Over Tax (TOT); that in respect of yarn cleared to their Surat Depot in the State of Gujarat, they claimed deduction @ 2% on account of TOT; that the Government of Gujarat by a Notification dt. 19-10-93 exempted sale of yarn of all kinds by a registered dealer to a special manufacturer of processed yarn or to an eligible unit to the extent of which the rate of TOT exceeds 0.25% of the total turn over, if the specified manufacturer furnishes to the selling dealer a certificate in Form 26 and if the processed yarn is sold within the State of Gujarat; that the Commissioner has confirmed the demand of duty for the period from March, 94 to March, 97 and imposed penalty on Appellant company, Shri P.C. Majumdar, Vice President (Business) and Shri S.C. Gupta, Manager (Sales), holding that the Appellants were eligible for deduction on account of TOT in real terms depending upon the class of customers in two specified and distinct areas. 3.The ld. Senior Counsel, further, submitted that at the time of clearance of yarn from the factory, the Appellants have no knowledge as to the location of the customers' dealers who would eventually buy the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along aware that they were claiming various deductions including deduction on account of TOT from the Depot Sale Price and the deductions claimed by them has been the subject matter of detailed investigation and adjudication by the Department; that the Department had issued two show cause notices dated 4-10-94 and 19-10-94 in respect of certain deductions claimed by them; that, however, the Department deliberately and consciously did not challenge the deduction claimed on account of TOT; that the Sales tax Returns were furnished to the Excise Department by the Depot at Surat from time to time; that the said Returns clearly disclosed the rate of TOT; that the Depot invoices were also furnished as acknowledged by the Department by letter dated 16-l2-96 and as such the Department was all along aware of sales to backward area; that this is evident from the Superintendent's letter dated 6-3-97; that the officers visited their factory on 18-9-97 and recorded statements on the present issue and records of the Surat Depot pertaining to payment of TOT were also resumed; that thus the notice cannot be issued after more than 2 years on 19-3-99. Reliance was placed on the decision in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working capital interest, discount, transit loss, selling agent commission etc; that as they had claimed deduction on account of TOT at flat rate of 2%, it was not disputed as such a deduction is admissible. He further mentioned that Department can be claimed to have come to know about two rates of TOT only in 1997 and not earlier; that as held by the Larger Bench of the Tribunal in Nizam Sugar Factory v CCE, Hyderabad, 1999 (114) E.L.T. 429 (T) = 1999 (34) RLT 864 that show cause notice issued beyond the period of six months, in case of suppression etc., from the date of knowledge will not be barred by limitation. In reply, the ld. Senior Counsel mentioned that the Appellants did not pay any duty short on the date of clearance of goods from the factory as the sale of goods in backward area was a subsequent act. 6.We have considered the submissions of both the bides. It is an admitted fact that there exists two rates for imposition of Turn Over tax in the State of Gujarat. The Appellants are also paying Turn Over Tax according to the respective rates depending on the area in which the Yarn is being sold by them. As per the provisions of Section 4(4)(d)(ii) of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they should know at the time of clearance of the yarn as to the location of customers/dealers who would eventually buy the goods. The fact of paying T.O.T. at the reduced rate has been suppressed by the appellants from the Department and as such larger period of limitation has been rightly invoked in the present matter. We do not find any substance in their submissions that in earlier two show cause notices the Department had not raised any objection about Turn Over Tax. It appears to us that this was simply for the reasons that Turn Over Tax is an admissible deduction, the Department did not challenge its deduction from the assessable value. The Department has issued the present show cause notice only on their coming to know of the factual position about T.O.T payable by the appellants. We also observe that the Department enquired from them in Dec., 1996 about the sales in backward area and the appellants under their letter dated 14-1-97 informed the Department that in backward area only 0.25% tax is payable. Thus the Department acquired knowledge for the first time under letter dt. 14-1-1997. Certainly the Department cannot claim suppression of the facts with effect from this dat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
