Commissioner of C. Ex. vs Web Impression (India) Pvt. Ltd.

We have heard Mr. Maity who urges for admission of the appeal on the various grounds as mentioned in the Memorandum of Appeal and with emphasis, on ground No. VIII at page 16 of admission of application which is quoted hereunder:

For that the Learned Tribunal failed to appreciate and interpret correctly the provision of Section 11A of the Central Excise Act and should have once it has held that there has been suppression with evade to payment of duty the period of five years is automatically attracted.

This matter has a past history which, we feel, ought to be recorded. This matter was reheard by the learned Tribunal pursuant to the judgment and order of the Hon''ble Supreme Court dated 27th November, 2008 [2009 (236) E.L.T. A54 (S.C.)]. The operative portion of the judgment and order of the Hon''ble Supreme Court is quoted hereunder

... By our separate judgment today in Civil Appeal Nos. 4872-5892 of 2000 we have set aside the order of CEGAT and remitted the matter to it to be dealt with afresh. The decision in the said case shall apply to the facts of the present case. The appeal will be heard afresh by the appropriate Bench of CEGAT which is presently known as Customs, Excise & Service Tax Appellate Tribunal (in short CESTAT).

Pursuant to the said direction of the Hon''ble Supreme Court the matter was reheard by the Tribunal and allowed the appeal of the Appellant by judgment and order dated 11th February, 2010 [ 2010 (257) ELT 568 ]. It appears that the learned Tribunal had allowed the matter and set aside the order impugned before it on the ground of limitation. It is submitted by Mr. Maity that on the facts and circumstances of the case the extended period of limitation in proviso of Section 11A of the Central Excise Act, 1940 is applicable.

We, therefore, quote the said provision -

Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement 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, by such person or his agent, the provisions of this Sub-section shall have effect for the period the words five years were substituted..

On plain reading of the aforesaid proviso it is clear that there must be amongst other suppression of fact with intent to evade payment of duty on the part of the Assessee, meaning thereby on the analysis of the fact, it is found that if there is no scope for any suppression of fact by the Assessee the above period of limitation as envisaged in the proviso is not applicable. The ordinary period of limitation of one year has to be followed is the rule and the provision of proviso in a fit case as mentioned therein is an exception. Therefore we were asked to examine whether the learned Tribunal has correctly concluded the question of limitation. It is absolutely mixed question of law and on fact. If it is not established by the revenue that there was suppression on the part of the Assessee with an intention to evade duty the said provision cannot be applied. In this case the show cause notice was issued on 6th November, 1997 in relation to duty for the period from 20th December, 1996 to 31st March, 1997. Thus the said extended period of limitation as mentioned in the proviso was invoked, on the ground that Appellant suppressed the material fact.

The learned Tribunal recorded that on 10th September, 1996 the Assistant Commissioner directed the Appellant to get registration under the Central Excise or submit a declaration for exemption of registration as Appellant is manufacturing gay wrapper falling under 4823 of the Tariff. This letter was replied by the Appellant on 20th September, 1996 thereby the Appellant explained their activity of printing of gay wrapper. Even on 24th January, 1997 the Assistant Commissioner again wrote a letter that the gay wrapper is classifiable under Chapter 48 of the Central Excise Tariff and conveyed to the Appellant that the activity undertaken by the Appellant amounts to manufacture. The Appellant on 14th March, 1997 again replied to the said jurisdictional Assistant Commissioner. The Appellant also obtained registration for manufacturing of the goods in question.

Thus the Tribunal has correctly recorded that the revenue was aware of the activity undertaken by the Appellant as on 10th September, 1996 when it was explained regarding the manufacturing process. Assistant Commissioner made a query even on 29th September, 1996. Everything was placed before the Assistant Commissioner. Had the Assistant Commissioner any doubt about this explanation he could have made search and seizure enquiry. It was not done so. Therefore it does not appear that there has been suppression on the part of the Assessee hence question of evading duty does not and cannot arise.

We presume that there must be some lapses on the part of the officials as had there been any doubt that the Respondent Assessee suppressing any real fact they could have made an enquiry, instead they sat tight over the matter.

We, therefore, conclude that on factual aspect when the Tribunal correctly held that there has been no suppression, question of extended period of limitation as mentioned in the proviso does not and cannot apply. The point of limitation can be taken by the Law Court as the Tribunal even if it is not taken subsequently by any of the parties. The principle of Section 3 of the Limitation Act is squarely applicable in this case and it has been rightly applied. Therefore there is no challenge against the aforesaid fact finding of the learned Tribunal as being perverse or based on no material.

In view of the above discussion we do not think that it is a fit case for admission. Accordingly, we dismiss the appeal.

Let xerox certified copy of this order be given to the parties, if applied for, upon compliance with all formalities.