ORDER
T.P. Nambiar, Member
1. This appeal is filed by the appellant against the order passed by the Collector. In para 8 of the impugned order, the Collector held as under:
8. I find that the party had suppressed true facts in their classification list and had wrongly availed the benefit of exemption under Notification No. 208/83 dated 1.8.83. They had suppressed the classification of inputs being received by them with an intention to wrongly avail the benefit of exemption under Notification No. 208/83 dt. 1.8.83 with a mala fide intention to evade payment of duty on the goods manufactuted by them. In view of the foregoing findings I hold that the raw materials namely M.S. Plates cuttings and scrap of steel and ship breaking scrap falling under subheadings 7212,7203.00 and 7215 of C.Ex Tariff are not specified in Column 2 of the Annexure to the Notification No. 208/83 dated 1.8.83 and as such they are not entitled to avail the benefit of exemption under the said notification. I hold that they have suppressed the classification of their inputs received by them and have intentionally wrongly availed the benefit of the said notification with an intention to evade C.Ex duty.
2. Shri N. Venkataraman, learned Counsel for the appellants contended before us that the period involved is from 3/86 to 28.2.87. He pointed out that the show cause notice was issued on 8.9.87. It is his contention that there was no suppression as alleged in the show cause notice. In this connection he drew our attention to the show cause notice wherein it is stated that the appellant had contravened certain rules. It is stated therein that the appellant cleared the goods with intent to evade payment of duty. He pointed out that in such case, it was for the department to have spelt out in the show cause notice what was the actual facts which were suppressed by them before the department in order to evade payment of duty. He pointed out that unless such averment is made in the show cause notice the extended period is not invocable. In this connection he relied upon the decision of the Hon’ble Supreme Court in the case of CCE v. HMM Ltd., . In that particular decision, the Supreme Court has held as follows:
2. The assessee contended before the Additional Collector of Central Excise that the show cause notice was time-barred under the main part of Section 11A since it was issued after the expiry of the period of six months stipulated therein but the Additional Collector sustained the notice on the ground that it was within five years impliedly holding that the purported action was under the proviso to Section 11A of the Act. There is no dispute that the show cause notice cannot be sustained under Sub-section (1) of Section 11A unless the proviso is attracted. Admittedly, it is beyond the period of limitation of six months prescribed under Section 11A(1) but it is within the extended period of 5 years under the proviso to that sub-section. Now in order to attract the proviso it must be shown that the excise duty escaped payment by reason of fraud, collusion or wilful mis-statement or suppression of fact or contravention of any provision of the Act or of the Rules made there under with intent to evade payment of duty. In that case the period of six months would stand extended to 5 years as provided by the said proviso. Therefore, in order to attract the proviso to Section 11A(1) it must be alleged in the show cause notice that the duty of excise had not been levied or paid by reason of fraud, collusion or wilful mis-statement or suppression of fact on the part of assessee or by reason of contravention of any of the provisions of the Act or of the Rules made there under with intent to evade payment of duties by such person or his agent. There is no such averment to be found in the show cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had been noticed or that the assessee was guilty of wilful mis-statemnt or suppression of fact. In the absence of such averments in the show cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11A(1) of the Act. The Additional Collector while conceding that the notice had been issued after the period of six months prescribed in Section 11A(1) of the Act had proceeded to observe that there was wilful action of withholding of vital information apparently for evasion of excise duty due on this waste/by-product but counsel for the assessee contended that in the absence of any such allegation in the show cause notice the assessee was not put to notice regarding the specific allegation under the proviso to that sub-section. The mere non-declaration of the waste/by-product in their classification list cannot establish any wilful withholding of vital information for the purpose of evasion of excise duty due on the said product. There could be, counsel contended, bona fide belief on the part of the assessee that the said waste or by-product did not attract excise duty and hence it may not have been included in their classification list. Bur that per se cannot go to prove that there was the intention to evade payment of duty or that the assessee was guilty of fraud, collusion, mis-conduct or suppression to attract the proviso to Section 11A(1) of the Act. There is considerable force in this contention. If the Department proposes to invoke the proviso to Section 11A(1), the show cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the excise department places reliance on the proviso it must be specifically stated in the show cause notice which is the allegation against the assessee falling within the four corners of the said proviso. In the instant case that having not been specifically stated the Additional Collector was not justified in inferring (merely because the had failed to make a declaration in regard to waste or by-product) an intention to evade the payment of duty. The Additional Collector did not specifically deal with this contention of the assessee but merely drew the inference that since the classification list did not make any mention in regard to this waste product it could be inferred that the assessee had apparently tried to evade the payment of excise duty.
On perusal of the above decision, he pointed out that in order to attract the proviso to Section 11A(1) it must be alleged in the show cause notice that duty has not been levied or paid, by the Revenue and there was collusion or wilful mis-statement or suppression of fact on the part of the assessee. Since there was no such allegation in the show cause notice he pointed out that invocation of this proviso cannot be attracted in this case.
3. Heard Shri S. Murugandi, learned DR. He reiterated the reasoning in the impugned order.
4. We have considered the submissions made before us. A perusal of the decision of the Hon’ble Supreme Court clearly goes to show that in order to attract the proviso to Section 11A(1), there must be allegation in the show cause notice that duty of Central Excise has not been levied, or paid, by reason of fraud, collusion or wilful misstatement or suppression of fact on the part of the assessee. There is no such allegation in the show cause notice. It is for the first time that these facts were mentioned in the impugned order. It is therefore, clear the appellants were not put on notice for any such wilful misstatement or suppression. As mentioned in the decision of the Supreme Court in the absence of such averment in the show cause notice, it is difficult to understand how the Revenue could sustain the show cause notice under the proviso to Section 11A(1) of the ECA 1944. On a perusal of the above decision, if the department proposes to invoke the proviso to Section 11A(1), the assessee must be put to notice as to which of the various commissions and omissions stated in the proviso has been committed to extend the period from 6 months to five years. A perusal of the show cause notice it is clear that no such facts were narrated in the show cause notice. This being the position, the invocation of the extended period of limitation is not permissible and therefore, the demand is barred by limitation. Since we have decided the appeal on the question of limitation, we are not going into the merits of the case. The impugned order is therefore, set aside and the appeal allowed.
Pronounced and dictated in the open court.