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TAXAP/2460/2009 7/ 7 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 2460 of 2009
=========================================================
COMMISSIONER
- CENTRAL EXCISE & CUSTOMS VADODARA - II - Appellant(s)
Versus
ORBIT
FABRICS LTD - Opponent(s)
=========================================================
Appearance
:
MR
RM CHHAYA for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MS.JUSTICE HARSHA DEVANI
and
HONOURABLE
MR.JUSTICE H.B.ANTANI
Date
: 09/12/2010
ORAL
ORDER
(Per
: HONOURABLE MS.JUSTICE HARSHA DEVANI)
In
this appeal under section 35G of the Central Excise Act, 1944 [the
Act], the appellant- Commissioner, Central Excise and Customs,
Vadodara, has challenged the order dated 2nd
July, 2009 passed by the Customs, Excise and Service Tax Appellate
Tribunal [the Tribunal], proposing the following two questions:
“[i] Whether, in
the facts and circumstances of the case, despite the clear cut
suppression of facts on the part of the assessee in not mentioning
the specific serial number and List Number applicable in the
exemption Notification No. 21/2002-CUS, the CESTAT is right in
holding that there is no suppression and allowing the appeal on
grounds of limitation?
[ii] Whether, in the
facts and circumstances of the case, the Hon’ble CESTAT is right in
ignoring the undertaking dated 5.6.2003 given by the assessee at the
time of clearance of their goods that “in case of any duty
liable to be paid by them as an 100% EOU the same will be paid by
them?”
The
respondent-assessee, a 100% Export Oriented Unit, debonded its
imported capital goods after obtaining necessary permission from the
Development Commissioner. At the time of debonding, two bills of
entry, both dated 2nd
July, 2003 were filed by the assessee, one for payment of customs
duty at the rate of 5% under the EPCG scheme and the other for
payment of customs duty claiming concessional rate in terms of
Notification No.21/2002-CUS dated 1st
March, 2002. A show cause notice dated 19th
September, 2007 came to be issued to the assessee in respect of bill
of entry No.1/2003-04 for recovery of unpaid additional customs duty
to the tune of Rs.21,39,320/- and special additional customs duty of
Rs.6,20,403/-, in all, Rs. 27,59,723/- along with penalty and
interest. The notice came to be adjudicated vide order dated 15th
May, 2008, whereby the duty demand came to be confirmed along with
penalty and interest.
Being
aggrieved, the assessee went in appeal before the Tribunal. Before
the Tribunal the learned advocate for the assessee did not dispute
the liability to pay the duty but contended that the show cause
notice was barred by limitation. The Tribunal, by the impugned
order, upheld the said contention of the assessee and set aside the
order impugned before it and allowed the appeal on the ground
of limitation.
Mr.
R.M. Chhaya, learned Senior Standing Counsel invited the attention
of the Court to the order made by the adjudicating authority, to
submit that the elements of willful mis-statement and suppression
were clearly made out in the facts of the present case. It was
submitted that in the bill No.1/2003-04, the assessee mentioned the
notification No.21/2002-CUS dated 01.03.2002 without mentioning the
serial number of the said notification under which it was claiming
exemption. It has also not mentioned the details of the additional
duty/special additional duty applicable in the case of the Bill of
Entry. As per serial No.250 of the said notification, customs duty @
5% plus additional duty was required to be paid and as per serial
No.251 of the said notification customs duty @5% was only required
to be paid. Thus, by not mentioning the serial number of the
notification, the assessee knowingly created a situation to mislead
the concerned officers to believe that its entire assessment was to
be done @ 5% of basic customs duty. It was submitted that in the
circumstances, the adjudicating authority was justified in invoking
the extended period of limitation and that the Tribunal was not
justified in throwing the burden on the revenue by holding that the
proper officer never pointed out that the countervailing duty or
special additional duty was also required to be paid by the
assessee. In support of his submissions, the learned counsel placed
reliance upon the decision of the Supreme Court in the
case of Motiram
Tolaram and anr v. Union of India and anr.,(1999)
6 Supreme Court Cases 375, and more particularly on the contents of
paragraph 9 thereof, wherein, it has been held that when under the
provisions of the Excise Act, an assessee wants to claim benefit of
an exemption notification, then, the onus is on him to prove and
show that the conditions, if any, which are imposed by the exemption
notification have been satisfied. Inviting attention to the impugned
order of the Tribunal, it was submitted that the assessee had not
disputed that it was required to pay duty, but had contested the
same only on the ground that the same was barred by limitation. It
was submitted that the assessee having not disputed the liability to
pay the amount, and having given an undertaking dated 5.6.to the JAC
that in case of any duty liable to be paid by it as a 100% EOU, the
same will be paid by it, cannot now be permitted to renege from such
undertaking and that the exchequer should not be deprived of the
revenue on the ground that the Assessing Officer had not properly
pointed out the amount of duty which the assessee was liable to pay
in accordance with law.
As
can be seen from the impugned order of the Tribunal, on merits, the
assessee has not disputed its liability to pay the duty before the
Tribunal. The only contention advanced on behalf of the assessee was
that the demand was barred by limitation inasmuch as the bills of
entry which were filed on 2nd
June, 2003 were duly assessed by the proper officer. It was
submitted that, the allegation
in the show cause notice about the suppression of correct serial
number of the notification was not in accordance with settled law,
inasmuch as the revenue was expected to know the correct rate of
duty required to be paid and could not pass the burden to the
assessee. It was submitted that the assessee, in accordance with its
understanding, had claimed the benefit of Notification No.
21/2002/CE and paid duty after filing bill of entry. If other duties
were required to be paid by it, the onus was upon the Customs
Officers to adjudicate its duty liability in accordance with law at
the time of assessment.
The
Tribunal, after considering the submissions advanced on behalf of
the assessee observed that the assessee had filed bill of entry
which was assessed by the proper officer, who, never pointed out
that the countervailing duty or special additional duty was also
required to be paid by the assessee. The Tribunal was of the view
that no objection having been raised at the time of assessment of
the bill of entry, the assessee could not be saddled with any mala
fide intention or suppression so as to justifiably invoke the longer
period of limitation. According to the Tribunal, this was the case
of mistake or lack of knowledge on the part of the assessee as also
on the part of the Customs Officer assessing the bill of entry, in
which case, the extended period of limitation was not available to
the revenue.
The
facts as emerging from the record of the case indicate that the
assessee had filed the bill of entry No.OFL/Debonding/01/2003-04,
calculating the Basic Customs Duty @ 5% amounting to Rs.6,90,875/-
on the capital goods availing exemption under Notification
No.21/2002-CUS, dated 1.03.2002. The said bill of entry came to be
assessed by the proper officer who at the relevant point of time,
did not raise any objection or point out to the assessee that it was
liable to pay countervailing duty or special additional duty.
According to the adjudicating authority, the assessee had not
mentioned the serial number and list number applicable for the
removal of capital goods with deliberate intention to mislead the
assessing officer regarding the rate of duty applicable. The
aforesaid view of the Adjudicating Authority is fallacious, for the
reason that in case the assessee had not indicated the serial number
of the relevant notification, it was for the concerned Assessing
Officer to point out the same to the assessee and call upon it to
state the proper facts. Without calling upon the assessee to state
the serial number under which the goods would fall, and without
pointing out any defect in the bill of entry filed by the assessee,
the concerned officer had assessed the bill of entry and had not
raised any demand of countervailing duty or special additional duty.
The assessee had rightly or wrongly claimed liability to pay duty at
a particular rate. At the time of assessing the bill of entry, it is
for the concerned officer to ascertain the actual duty liability.
Mere non-mentioning of the serial number under which the goods
would fall cannot be equated with suppression, because it was for
the concerned officer to even otherwise verify from the description
of the goods as to under which item number the same would fall and
assess the duty liability accordingly. The concerned officer having
failed to do so, the onus cannot be thrown on the assessee.
In the aforesaid
backdrop, it cannot be said that there was any wilful misstatement
or suppression on the part of the assessee so as to invoke the
extended period of limitation. The Tribunal, was therefore,
justified in holding that the show cause notice was time-barred and
that no case was made out for invoking the extended period of
limitation.
For
the foregoing reasons, there being no infirmity in the impugned
order of the Tribunal, the same does not give rise to any question
of law as proposed or otherwise, much less, a substantial question
of law, so as to warrant interference. The appeal is accordingly
dismissed.
[HARSHA
DEVANI, J.]
[H.B.
ANTANI, J.]
pirzada/-
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