w w w . L a w y e r S e r v i c e s . i n

Sri Ranganathar Industries (P) Ltd., Unit-I and Others V/S CCE, Coimbatore and Others.

    E/390/2009, E/367/2009, E/368/2009, E/378/2009 (Arising out of Order-in-Original No.06/2009 (Commr.) dt. 27.03.2009 passed by Commissioner of Central Excise, Coimbatore), E/219/2010, E/205/2010, E/206/2010, E/216/2010, E/189/2010, E/297/2010 (Arising out of Order-in-Appeal No. 06/2010-CE to 10/2010-CE dt. 29.01.2010 passed by Commissioner of Central Excise (Appeals), Coimbatore) and Final Order Nos. 40469-40478/2018

    Decided On, 28 February 2018

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai

    By, MEMBER

    For Petitioner: J. Shankarraman, Advocate, M. Saravanan and S. Venkatachalam, Advocate And For Respondents: A. Cletus, ADC (AR), S. Govindarajan, AC (AR) and K.P. Muralidharan, AC (AR)

Judgment Text

1. This bunch of appeals since involving same issue, they are taken up together for common disposal.

2. The facts of the case are that M/s. Sri Ranganathar Industries Pvt. Ltd. Unit-I (hereinafter referred to as SRIPL, Unit-I) are manufacturers of Stainless Steel and Mild Steel Rough Casting falling under CETH No. 73 & 84. SRIPL, Unit-I were availing cenvat credit of inputs like Steel Scrap and MS scrap received mainly from Central Excise registered dealers. Pursuant to certain investigations, it appeared to the department that SRIPL, Unit-I had taken ineligible cenvat credit fraudulently on non-duty paid scrap in the guise of receiving HR coil, HR sheet, MS rounds, MS Bar rods etc. whereas they have received only MS scrap/SS scrap from the concerned Central Excise dealers. Accordingly, SRIPL, Unit-I was issued a show cause notice dt. 05.09.2007 inter alia proposing recovery of cenvat credit of Rs. 80,96,900/- on the goods received during August 2002 to October 2006 along with interest thereon and imposition of penalty under various provisions of law. The SCN also proposed imposition of penalties under Rules 25 and 26 of the Central Excise Rules, 2002 against M/s. Sree Vishnu Steels, M/s. Lakshmi Traders, M/s. R.K. Steels & Alloys and M/s. Ubique Alloys Pvt. Ltd. After due process of adjudication, the Commissioner vide impugned Order-in-Original No. 06/2009 (Commr.) dt. 27.03.2009 inter alia, held that there is sufficient evidence, material as well as documentary evidence to prove that SRIPL, Unit-I suppressed facts that goods received in the factory were only scrap and hence confirmed the proposal in the SCN to demand recovery of cenvat credit of Rs. 80,96,900/- with interest thereon, and equal penalty was imposed under Rule 15(2) of CCR 2004 read with Section 11AC of the Central Excise Act, 1944. Penalty of Rs. 20,25,000/- was also imposed on SRIPL, Unit-I under Rule 13(1) of the Rules read with Section 38A of the Act and Rule 15(1) of CCR, 2004. Hence appeal No. E/390/2009 by SRIPL, Unit-I. The following penalties were also imposed under Rule 25 & 26 of CER 2002 on the co-noticees, who have filed appeals as noted under:-

i) Rs. 4,50,000/- on M/s. Lakshmi Traders

ii) Rs. 11,50,000/- on M/s. Sree Vishnu Steels [Appeal No. E/368/2009]

iii) Rs. 2,50,000/- on M/s. R.K. Steels & Alloys [Appeal No. E/367/2009]

iv) Rs. 3,10,000/- on M/s. Ubique Steels & Alloys [Appeal No. E/378/2009]

3. On similar allegations department initiated proceedings against Sri Ranganathar Industries Pvt. Ltd., Unit-II (hereafter referred to as SRIPL, Unit-II by way of issue of a show cause notice dt. 09.10.2007 alleging that the said assessee had actually received non-duty paid SS scrap and MS scrap in the guise of HR coil, HR sheets, MS rounds, MS bar rods, MS wire coils etc. from various registered Central Excise dealers and thereby had fraudulently availed ineligible cenvat credit of Rs. 40,97,755/-. The said amount of cenvat credit along with interest was proposed to be recovered from SRIPL, Unit-II along with imposition of penalties under various provisions of law. The concerned Central Excise dealers and some other persons were also made as noticees to the SCN. In adjudication, the Commissioner vide Order-in-Original No. 06/2009 (ADC) dt. 30.03.2009 confirmed the proposal for recovery of credit with interest and also imposed equal penalty under Rule 15(2) of CCR 2004 read with Section 11AC of the Central Excise Act, 1944. Penalty of Rs. 10 lakhs was also imposed on SRIPL, Unit-II under Rule 13(1) of CCR, 2002 read with Section 38A of the Act and Rule 15(1) of CCR 2004. Hence Appeal No. E/219/2010 by SRIPL, Unit-II. The following penalties were also imposed under Rule 25 & 26 of CER 2002 on the co-noticees:

i) Rs. 1,00,000/- on M/s. Lakshmi Traders

ii) Rs. 5,00,000/- on Shri V. Narayanaswamy, Managing Director of SRIPL, Unit-II

iii) Rs. 5,00,000/- on M/s. Sree Vishnu Steels [Appeal No. E/205/2010]

iv) Rs. 5,00,000/- on M/s. R.K. Steels & Alloys [Appeal No. E/216/2010]

v) Rs. 1,00,000/- on Shri R. Sekar, Manager of R.K. Steels & Alloys.[Appeal No. E/206/2010]

In Appeal, the Commissioner (Appeals) vide impugned Order-in-Appeal No. 06/2010-CE to 10/2010-CE dt. 29.01.2010 restricted the demand to the extent of recovery of cenvat credit to normal period of one year with interest thereon, reduced the penalty on SRIPL, Unit-II under Rule 13(1) of CCR 2002 read with Section 38A of the Act, to Rs. 1,00,000/-. Appeal of Shri V. Narayanaswamy, Managing Director of SRIPL, Unit-II was allowed by setting aside penalty imposed on him. However, appeals of Sree Vishnu Steel, R.K. Steels & Alloys and Shri R. Sekar were rejected. Hence the last named three appellants filed Appeals E/205/2010, E/216/2010 & E/206/2010.

Revenue aggrieved by impugned Order-in-Appeal dt. 29.01.2010 against restricting the demand to normal period of one year and reduction of penalty on SRIPL, Unit-II filed Appeal E/189/2010 as also appeal E/297/2010 against dropping of penalty on V. Narayanaswamy, Managing Director of SRIPL, Unit-II.

4. On 14.02.2018, when the matter came up for hearing on behalf of assesses Shri J. Shankarraman, Advocate, Shri M. Saravanan, Consultant and Shri S. Venkatachalam, Advocate appeared and made oral and written submissions which can be broadly summarized as follows:

i) Appellant has all along been describing the inputs as MS Scrap or Stainless Steel Scrap in erstwhile Rule 57G Declarations. The appellant never indicated inputs consumed by them as Stainless Steel Sheets, mild steel sheets etc. It has always been their claim that they are using only scrap of mild steel and stainless steel. The purchase order would also indicate the above fact. The show cause notice alleged that the materials received by the appellant are non-dutypaid goods, which is without any basis or without any evidence. This presumption of the Department is totally incorrect for the simple reason that the appellant has been paying the supplier of raw material by way of cheque only, it includes the excise duty element. If the appellant had received non duty paid goods then they would not have paid the excise duty element to the Registered Dealers who supply the same.

ii) There was no necessity for the appellant to buy non duty paid goods under the guise of duty paid invoices for the following reasons:

a. The appellant was very particular about the quality of the raw material and therefore a sample would be tested before taking the scrap inside the factory.

b. Further major portion of the goods (nearly 90%) manufactured by the appellant are cleared for export.

c. The appellant has got substantial credit in his books and is not in a position to utilize the same. Hence there cannot be any motive to avail CENVAT credit on alleged non duty paid goods.

d. The appellant pays his suppliers by cheque only and it includes duty.

iii) Shri A.L. Peria Karuppan, Proprietor of M/s. Raghavendra Steels, Ganapathy, Coimbatore 6 (first stage dealer) in his statement given before the Superintendent of Central Excise on 21.08.2007 had categorically stated that he receives HR Sheet, CR sheet, HR coil, HR STL coil from manufacturers like M/s. JSW Steel Limited, M/s. Salem Steel Plant Ltd. He stated that he supplied raw material along with CENVAT invoices to his customers. When the statement of Mr. Velusamy of Vishnu Steels, and V. Anandan of Lakshmi Traders who were his customers, were shown to him, he denied the statement given by these people and categorically stated that he sent HR Coil and HR Sheets along with the CENVAT invoices. He had also pointed out that he gives HR Sheet, CR sheet, HR Coil, HRSTL coil which was cut according to the requirement of the customer. That the said statement is not made part of RUD in the show cause notice.

iv) The appellant has not committed any mistake by taking credit based on the invoices issued by the Registered Dealers. The entire transaction with their suppliers of raw material is transparent and the records are clear. The appellant issues Purchase Order to their suppliers of raw material indicating the description of the material, chemical composition of the ingredients, quantity, rate etc.

An endorsement is made on the invoice as follows : EXCISE DUTY : AS APPLICABLE AGAINST MODVAT INVOICE ONLY S.T. INCLUSIVE IN THE ABOVE PRICE. From the above, it would be clear that only on production of central excise invoice indicating the duty element, the supplier would be paid the excise duty element. When the goods are received inside the factory the same is weighed and also tested in the lab. If there is a shortage the same is indicated in the internal document with an endorsement ACCEPTED WITH DEVIATION. The quantity rejected is also indicated in the internal document. A lab report is also prepared. Payment is made only to the extent of goods accepted.

v) The appellant was under a bona fide belief that the goods supplied to them are duty paid and rightly so. In fact that is the reason why they had paid inclusive of central excise duty. While so, there is no justification to demand the said credit from the appellant based on the allegation that they have taken credit on non-duty paid goods.

vi) There is nothing on record to show that the material supplied to the appellant has not suffered central excise duty.

vii) Show Cause Notice C. No. V/72/15/155/2000 Cx. Adj (Sl. No. 171/2001) dated 18.4.2001 was issued earlier by the Joint Commissioner of Central Excise, Coimbatore on similar lines for the period from 10.10.1998 to 1.4.2000. In that notice also it was alleged that the appellant availed credit on non-duty paid goods viz., SS Scrap and MS Scrap. It was alleged that the inputs actually received by the appellant was different from the products described in the invoice and they had suppressed the fact and wrongly availed the duty paid on MS Sheets/Plates. A perusal of the show cause notice would show that similar issue was dealt with earlier and thereafter orders were passed against the appellant by the original adjudicating authority which was upheld by the appellate authority. Thereafter the Hon'ble Tribunal vide Sivamani & Co. and Sri Renganathar Industries (P) Ltd. Vs. CCE, Coimbatore: 2005 (188) ELT 162 had held in favour of the appellants herein. The present proceedings are nothing but an improvised version of the earlier show cause notice. From the above it could be seen that the earlier effort of the Department was held to be incorrect by the decision of the Hon'ble Tribunal.

viii) With respect to the other noticees, it was argued that when no proper case can be established against SRIPL, Unit-I and SRIPL, Unit-II, their raw material suppliers cannot be penalized. So also, Shri P. Sekar is only an employee of SRIPL, Unit-II and it cannot be said that he was the person responsible for any alleged infraction on the part of the company. Further penalty has been imposed under Rule 25 & 26 of CER 2002. The provisions to penalize any person for issuing invoices without delivery of goods were inserted in Rule 26 only on 01.03.2007 whereas in this case, the impugned invoices are dated 16.06.2005 and 18.07.2005 and hence not applicable. Further penalty under Rule 26 can be imposed only upon the person and not on the company.

ix) Ld. counsels relied upon the following case laws:

(a) CCE, CUS & ST Vs. Juhi Alloys Ltd : 2014 (302) ELT 487 (All.)

(b) CCE, Mumbai-V Vs. Mahindra & Mahindra Ltd : 2017 (350) ELT 492 (Bom.)

(c) CCE Vs. Tata Motors Ltd : 2013 (2940 ELT 394 (Jhar.)

(d) CCE, Delhi Vs. R.S. Industries 2008 (228) ELT 347 (Del.)

(e) CCE, Chandigarh Vs. Mini Steel Traders : 2014 (309) ELT 404 (P & H)

(f) Ram Ganga Cement (Pvt.) Ltd. Vs. CCE, Meerut : 2015 (321) ELT 299 (Tri.-Del.)

(g) Manoranjan Singh Duggal Vs. CCE, Delhi : 2015 (325) ELT 892 (Tri.-Del.)

5. On the other hand, on behalf of the department, Ld. A.R. Shri A Cletus led the arguments and put forward various submissions which can be summarized as under:

i) For melting only scrap can be used and that too in small pieces since mouth of the furnace is only 1 feet. If raw material is other than scrap as mentioned in Cenvat invoices, it does not make commercial sense to buy coils/sheets and then cut them to less than 1 feet size.

ii) The purchase order and commercial invoices clearly indicate that what was intended and what was received was only scrap. The investigation has also produced other corroborative evidences which clearly justify the impugned orders. In the Goods Received Notes (GRN) the goods are mentioned as scrap. From the investigation conducted in respect of the testing of the raw material received and also the statements of concerned persons, it is also been established that the raw material received is nothing but scrap.

iii) At the time of visit of the factory no raw material in the form of HR coils/sheets were found; the only raw material that was found was 4000 MTs of scrap whereas the assessee had taken cenvat credit on HR coils, SS Coils etc. Thus the purchase order, commercial invoices, GRN, testing in lab, all indicated the raw material used by the appellant as scrap, whereas, the cenvat invoices only showed the items as HR Coils, SS coils etc. Further, invoices issued by the registered dealers reflected a lower price of SS coils etc. against the original purchase price at which the dealers had obtained such goods. It does not make business prudence that dealers would resell SS coils/plates etc. at lower price than what they had paid for them. This also clearly indicates that although raw material had been shown as SS coils etc. in the cenvat invoices however only much cheaper scrap was actually sent by the dealers and received by SRIPL Unit-I and Unit-II.

iv) It is not relevant to establish whether the assessees had any motive in taking such allegedly irregular credit. When only cheaper scrap has been received, appellants are not eligible to avail credit as if the goods received were SS coils etc. Hence even if the appellants claim that they have predominantly exported their final products, it would still not make any difference to the charge of fraudulent availment of cenvat credit. It is not material whether the assessee have accumulated unused credit or claimed rebate or refund of cenvat credit pursuant to exports made by them.

v) There is clear suppression on the part of assessee concerned since they have suppressed the fact of not having received SS coils etc. and that they had actually received only scrap. Appellant cannot take shelter of earlier Tribunal's Order No. 946-947/2005 dt. 06.07.2005 since each act of clandestine activity is a new modus and is different method of suppression with intent to evade payment of duty. Hence the tribunal decision cannot help the assessee to argue that the present proceedings are hit by limitation.

vi) As discussed in the impugned orders, the onus is very much on the person availing the credit to ensure genuine nature of the goods and the documents received before availing the cenvat credit.

vii) Hence modus operandi of paper trading of invoices has been adopted in these cases. Cenvat invoices have been issued by certain dealers who supplied non-duty paid scrap to SRIPL Unit-I and Unit-II and yet issued Cenvat invoices for SS coils/plates etc., without actually transacting goods shown in the invoices. Dealers have acted in connivance in the entire modus operandi which is fully established.

viii) Revenue has filed appeals No. E/189/2010 & E/297/2010 being aggrieved by the order passed by Commissioner (Appeals) in setting aside the demand beyond the normal period. The Commissioner (Appeals) erred in setting aside the demand for the extended period when in para 4.9 he has observed that there is a racket for paper trading of dealers invoice widely in the area, and that appellants being in business have every reason to know about it. The original authority has elaborately discussed how the assessee have been wrongly availing credit without receiving the goods described in the invoices. The Commissioner (Appeals) erred in accepting the contention of assessee that there is no need for them to avail wrong credit as they are accumulating the credit balance since 90% of their goods are exported and that therefore there is no intention to evade payment of duty. When assessee has availed credit wrongly, the Commissioner (Appeals) need not look into the question whether such act benefited them or not. The issue whether there is intention to evade payment of duty need not be considered when it is established that credit has been fraudulently availed.

6. Heard both sides. In our view, the core issues that come up for decision in this matter can be framed as under:

(1) Whether there is sufficient evidence that SRIPL Unit I & II had availed cenvat credit on invoices issued by dealers declaring despatched items as SS sheets/MS sheets, coils etc. and that actual goods received by SRIPL Unit I & II was only MS/SS scrap.

(2) Whether the proceedings per se are hit by limitation since on similar dispute related to inputs CESTAT Chennai vide Final Order No. 946-947/2005 dt. 06.07.2005 had held in favour of SRIPL and the supplying dealer M/s. Sivamani & Co. Private Ltd.

7. The assessees have been at pains to contend that the raw material received by them was very much in the nature of scrap. Though it was mentioned as HR Coils, Sheets etc., in the Cenvat invoices, these are cuttings of HR Coils, Sheets etc., procured from the registered dealers. Such goods were loosely known as scrap in trade. The main allegation is that in the Cenvat invoices the description of goods (raw material) is HR Coils, HR Sheets, MS Rounds, MS Wire Coil etc., whereas in commercial invoices and other documents the goods (raw materials) are described differently as MS scrap. The department thus alleges that assessee has not received any goods in nature of HR coils, MS rounds, Sheets etc., and therefore has availed credit fraudulently.

8. Cenvat credit scheme allows to avail credit on invoices of duty paid on inputs/raw materials supplied by the manufacturers and registered dealers. Only first stage and second stage dealers are permitted to transfer the credit of duty involved in the inputs as the Cenvat credit Rules 2002/2004. In the case before are M/s. Sree Vishnu Steels and M/s. Lakshmi Traders are second stage dealers whereas M/s. R.K. Steel and Alloys and M/s. Ubique Alloys are first stage dealers. Apart from these, department has recorded statement of Shri. Periakaruppan, who is also a first stage dealer. Shri A. Periakaruppan, Proprietor of M/s. Sri Raaghavendra Steels, one of the dealers, on 21.08.2007 deposed that they received HR sheet, CR sheet, HR coil, HR, SR coils from JSW Steel Ltd. and Salem Steel Plant Ltd., and sold to second stage dealers and few companies. He has unequivocally stated that he used to cut the above goods and sell as per customers requirements. That he had sold goods to second stage dealers such as M/s. Sree Vishnu Steels and M/s. Lakshmi Traders. Department has heavily relied upon the statement of ShriK. Veluswamy of M/s. Sree Vishnu Steels and Shri V. Aananthan of M/s. Lakshmi Traders contending that these two have stated that Shri Periakaruppan had sent only invoices without goods. However, Shri A. Periakaruppan, denied the statement of these two persons and categorically reiterated that he had sent the goods (HR coils and HR sheets) only along with cenvat invoices after having cut them to size as per the requirement of the customers. We find however that while the lower appellate authority in para 4.4 of the impugned order has taken note of the statement of Shri A. Periakaruppan, however, the assertions given by that person has been brushed aside on the ground that it was just an argument after a long time gap to counter the version made earlier. It is also relevant to note that the said Shri K. Velusamy had, through his statement dt. 18.11.2006 read with his cross examination on 07.08.2008, retracted his admissions made earlier. Shri K. Velusamy had stated that officers had visited premises four times earlier and that it was suggested by them that he had to admit that he received only cenvat invoices. So also we find that V. Ana than in his initial statement dt. 21.11.2006 had given a statement inter alia that he gets only Central Excise invoices and commercial invoices through agents of first stage dealers and manufacturers and no goods are being received by him. However, at the time of cross examination on 07.08.2008, V. Ana than stated that he has given such statement because he was threatened by officers. Once the initial admittory statements have been retracted in cross examination, the department's reliance on those statements in support of their allegation will naturally get demolished.

9. Another contention of the appellant is that they received only goods of SS coils, sheets etc. which in commercial parlance is known as scrap which is the reason why in the commercial invoices description is given as scrap. However, as to supplier's invoices only cut to size HR Coils/SS sheets/plates etc., as purchased from manufacturers like M/s. JSW Steel or Salem Steel Plant were mentioned. The dealers/suppliers prepared the Central Excise invoices on the basis of goods received by them from the said steel plant s. Appellant has consistently asserted that this is the precise reason of calling the goods as scrap and that the test reports have also indicated the same. We find merit in these contentions. Interestingly, the previous case booked against the appellants which resulted in the earlier CESTAT Order No. 946-947/05 dt. 06.07.05, alleging that the dealers had purchased HR steel, coil sheets/plates etc. from various manufactures and supplying cuttings to SRIPL. While there was no dispute over this factum, the department in that case found fault with the factum of the dealers, even after such cutting having issued invoices with the same description and classification as was described in the invoices under which they purchased from manufacturers.

10. Viewed in this light, there is no reason for us not to give credence to the statement of Shri A. Periakaruppan both in his initial statement and also in a subsequent one, who has asserted that he had supplied only such SS coils/plates etc. received from the manufacturers, after cutting them to size as was required by SRIPL. We are not able to understand how the department, in the present case, has differed with the stand that was taken in the earlier proceeding and further why statements of A. Periakaruppan have not been relied upon or made part of the SCN. At this juncture, it would be worthwhile to reproduce para-3 of CESTAT Final Order No. 946-947/2005 dt. 06.07.2005 in the earlier proceedings as under:

3. The immediate question before me is whether M/s. SRIL are entitled to avail Modvat credit on the cuttings of plates, sheets etc. Supplied by SCPL. It is not in dispute that these are cuttings of plates, sheets etc. falling under heading 72.08. The Revenue has no case that the thickness of the plates, sheets etc. was reduced in the activity of cutting. Obviously, the cutting process resulted in reduction of area only. Though thickness is a parameter relevant to classification of these goods under Chapter 72 of the CETA Schedule, area is irrelevant. Sheets, plates etc. Classifiable under heading 7208 are so classifiable in reduced area also. Hence the cuttings supplied by SCPL to SRIL cannot be treated differently from the sheets, plates etc. From which they were cut. In selling the cuttings to M/s. SRIL, SCPL were only dealing in sheets, plates etc. hence the cuttings were correctly declared by SRIL. As the department has not case that SRIL took Modvat credit of duty in excess of what was paid on the cuttings by SCPL, there is no dispute in terms of the quantum of credit. In the circumstances, I hold that M/s. SRIL were taking Modvat credit on cuttings of plates, sheets, etc. Classifiable under heading 72.08 as declared by them under Rule 57F and were not taking credit on scrap (Heading 7204) as alleged by the department. They were eligible for the credit. It would follow that no offence can be attributed to SCPL in connection with the regular availment of credit by SRIL.
11. We thus find that the main planks of the department's case against the assessee do not stand to scrutiny. There is also no other cogent or compelling evidence which can prop up department's allegation.

Further, even the allegation made by the department that assessees have manufactured their final products by procuring locally manufactured scrap, is also not backed up by any corroborative evidence and can at best be termed as an assumption. If the department alleges that appellant has not received any goods as per the Cenvat invoices and has only received scrap which is locally procured then, the department has to establish from where and how appellants have procured such local scrap. There is no evidence of suppliers of local scrap, transporters, payment to such suppliers etc. The case of the department therefore does not sustain on merits.

12. We also find merit in the plea of limitation raised by the appellants. The SCN has been issued on 05.09.2007 against SRIPL Unit I (Impugned order for Appeal No. E/390/2009) for the period August 2002 to October 2006 invoking extended period under proviso to Section 11A(1) of the Central Excise Act on the ground that SRIPL, Unit-I have deliberately taken ineligible cenvat credit on non-duty paid scrap by committing fraud with an intention to evade payment of duty and utilising the said credit during the said period. So also, in respect of Appeal E/219/2010, the period involved is September & October 2006 and the SCN dt. 09.10.2007 has been issued similarly invoking extended period on the same grounds. We find that major part of the periods sought to be covered in the SCN are beyond the normal period of limitation. Although extended period of limitation has been invoked we are not able to appreciate how there can be an intent to evade payment of duty considering that the major chunk of their final products of these appellants were exported. Appellants have stated that they have not benefited otherwise by taking any irregular credit as alleged by the department. The proviso to Section 11A(1) would be attracted when there is suppression of facts with intent to evade payment of duty. The department has no case that appellants utilized the alleged wrongly availed credit to discharge duty liability. There is no evidence coming forth in this angle. The contention of the Ld. AR that the intention to evade payment of duty need not be proved lacks any legal basis.

13. It would be appropriate to draw inference from the Hon'ble Supreme Court in the case of Cosmic Dye Chemical Vs. CCE Bombay : 1995 (75) ELT 721 (SC) holding that it is not correct to say that there can be suppression or mis-statement of fact, which is not willful and yet constitutes a permissible ground for t

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he purpose of proviso to Section 11A(1) of the Central Excise Act. The relevant paragraphs of above Supreme Court judgment are reproduced as under: 4. In short, the Tribunal was of the opinion that so far as fraud, suppression or mis-statement of fact in the information statutorily required to be supplied to the excise authorities is concerned, question of intent is immaterial. 5. The main limb of Section 11A provides limitation? of six months. In cases, where the duty is not levied or paid or short-levied or short-paid or erroneously refunded, it can be recovered by the appropriate officer within six months from the relevant date. (The expression 'relevant date is defined in the Section itself). But the said period of six months gets extended to five years where such non-levy, short levy, etc., is by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules with intent to evade payment of duty...... 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 are concerned, they are clearly qualified by the word willful 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. It is, therefore, not correct to say that there can be a suppression or mis-statement of fact, which is not willful and yet constitutes a permissible ground for the purpose of the proviso to Section 11A. Mis-statement or suppression of fact must be willful. 14. In the impugned Order-in-Appeal No. 06/2010 to 10/2010-CE dt. 29.01.2010 (Impugned order for Appeal No. E/219/2010, E/189/2010, & E/297/2010) the lower appellate authority therein in para 4.8 of the order has addressed this contention of the appellant and has restricted the demand proposed in the SCN only to the normal period. We therefore find that in the appeals filed by SRIPL unit I & II and other co-noticees, there is no justification for invoking extended period of limitation. 15. In the light of discussions made herein above, we have no hesitation in concluding that the proceedings initiated by the department which have resulted in the appeals filed by SRIPL Unit I & II and other co-noticees are not only hit by limitation for the predominant period covered in the SCN, but more particularly cannot be sustained on merits. This being so, the impugned orders are set aside. Assessee's appeals No. E/390/2009, E/367/2009, E/368/2009, E/378/2009, E/219/2010, E/205/2010, E/206/2010 & E/216/2010 are allowed with consequential relief, if any, as per law. 16. For these very same reasons, no merit is found in the department appeals No. E/189/2010 & E/297/2010 for which they are dismissed.