LIGHT PUBLICATIONS LIMITED Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in the appeal is whether extended period for issuing the show -cause notice for demanding duty under Section 11A of the Central Excise Act can be issued on 2.4.91 when a show cause notice had already been issued earlier on 18.8.89?

(2.) SHRI A.P. Hathi, Learned Advocate, submitted that the appellants manufactured printed cartons and availed of benefit of Notification No. 175/86 -CE dated 1.3.86, as they were having a SSI registration certificate; that a show cause notice dated 18.8.89 was issued to them by the Superintendent, Central Excise, Baroda for demanding Central Excise duty amounting to Rs. 7,02,183.79 for the period from 26.7.88 to 21.8.89 on the ground that the appellants were registered with DGTD with effect from 26.7.88. It was also mentioned in the said notice that after amendment of Notification No. 175/86 by Notification No. 244/87 dated 30.10.87, the benefit of waiver of registration was not available to the units registered with DGTD. They paid the differential duty. The Learned Advocate further submitted that another show cause notice dated 2.4.91 was issued to the appellants for demanding the duty amounting to Rs. 5,99,423.23 for the period from 30.10.87 to 25.7.88 alleging suppression of facts regarding registration of appellant's unit with DGTD. The Learned Commissioner, in the impugned order confirmed the demand of duty, imposed a penalty of Rs. 5 lakhs on them and ordered redemption of confiscated land, building, plant etc. on payment of fine of Rs. 2 lakhs. The Learned Advocate contended that demand is time barred as the department had specific and definite knowledge at least from 20.10.89, the date on which the officers visited their factory; that the duty had already been earlier demanded on the same basis, on the same grounds and on the same contentions; that the earlier show cause notice dated 18.8.89 clearly mentioned the fact about the department's knowledge; that order their letter dated 3.4.89, they had informed the department about their registration with DGTD; that in classification list effective from 1.12.88 they had clearly stated and declared that their unit was registered with DGTD. The reliance was placed on the decision in the case of Bajaj Auto Ltd. v. CCE, Pune in which it was held that as the department was aware of the assessees' practice of clearing the waste and scrap of steel wire, no allegation of wilful mis -statement or suppression of facts can be sustained. He also relied upon the decision in the case of Tech Invest (India) Pvt. Ltd. v. CCE 1999 (47) ELT 665 (T), Tribunal, in the light of the facts that the appellants had clearly indicated in the classification lists about manufacturing process and the principal raw material and that the department had initiated the proceedings against the appellants, held that the department cannot contend that the appellants had suppressed or made any mis -representation. The Learned Advocate finally relied upon the decision in the case of S.D. Kemexc Industries v. CCE and submitted that in the instant case, extended time limit will not be applicable as the department had definite knowledge and that no penalty can be imposed on the appellants as there was no mala fide and no intention to evade payment of duty.

(3.) SHRI H.K. Jain, Learned SDR, submitted that the burden is on the assessee to prove that the unit is eligible for the exemption; that Mrs. Bhagat, authorised signatory, stated in her statement dated 15.11.89 that the value of the plant and machinery exceeded the limit of Rs. 25 lakhs since 1986 as it was 49.5 lakhs in 1986; Rs. 61.64 lakhs in 1987 and Rs. 65.42 lakhs in 1988 -89; that this not brought to the notice of the department; that Mrs. Bhagat in her subsequent statement dated 29.11.89 stated that the unit was a small scale unit and was registered with DGTD and these facts were reported to the department only when the revised classification list was filed on 15.11.89; that the unit suppressed these facts in their classification list filed from 20.7.87 onwards. Shri Jain also contended that once it is evident that they were not registered as an SSI unit, their plea that the exemption can be denied only from the date of registration with DGTD and not from 30.10.87 (The date of issue of Notification No. 244/87) is not tenable. He also submitted that the knowledge attributed to the department is after the period involved in the show -cause notice; that the extended period does not get curtailed by the intervening development of the department coming to know about the suppressed facts. He relied upon the decision in the case of Indian Oxygen Ltd. in which it was held that the limitation of 5 years is not forfeited or reduced by acquisition of knowledge subsequently by the department about an assessee's activities. He also placed reliance on the decision in the case of Pure Drinks Pvt. Ltd. v. CCE in which Tribunal decided that "the limit of five years will run from the date of alleged removal and this cannot be curtailed by the intervening development of the officers detecting the offence and coming to know of the non -payment of duty". In reply, the Learned Advocate submitted that the SSI certificate issued to them was not cancelled and they did not cease to be an SSI unit automatically on crossing the limit of investment on plant and machinery. He also submitted that as they were availing of the SSI exemption under Notification No. 175/86 in the preceding financial year, the benefit of the Notification is available to them as per second proviso to para 4 of the Notification No. 175/86 as held in the case of Accura Industries v. CCE .