Allegation of suppression cannot be alleged in case concerned officer had de-bonded the unit

Virgo Valves & Controls Pvt. Ltd. Vs Commissioner of Central Excise (CESTAT Mumbai)

Conclusion: When the unit was de-bonded and no dues certificate was issued to the assessee, it was the duty of the officer, who gave no dues certificate to verify the contents whether any dues liability was pending against the assessee or he had correctly declared the true facts for de-bonding of unit. When the concerned officer had de-bonded the unit along with no dues certificate, allegation of suppression could not be alleged against assessee in this case.

Held:

In the instant case, assessee had made complete declaration in respect of their “finished goods” as well ‘WIP – Indigenous” while making the request for de-bonding. These were examined and verified by the jurisdictional Central Excise Authorities while issuing the “No Dues Certificate” to assessee. Even the figures stated in the declaration made by assessee in their declaration, no dues certificate issued by the authorities do tally. Subsequent to issue of the no due certificate by the jurisdictional officer, the revenue could not have proceeded to issue the show cause notice dated 09.02.2016, by taking the same figures as declared by assessee to the jurisdictional authorities as early as in 2013. These figures also were reflected in the no dues certificate issued by the jurisdictional authorities. Revenue had invoked extended period of limitation as provided for by Section 11 A of Central Excise Act to make this demand. It was held that when the unit was de-bonded and a no dues certificate was issued to the respondent, it was the duty of the officer, who gave no dues certificate to verify the contents whether any dues liability was pending against the assessee or he had correctly declared the true facts for de-bonding of unit. When the concerned officer had de-bonded the unit along with no dues certificate, allegation of suppression could not be alleged against the respondents in this case. Hence, there was no infirmity with the impugned order, wherein the lower appellate authority had held that “facts that how the extended period under Section 11A(1) was invocable in the above circumstances, the demand raised against the respondent was time barred”.

FULL TEXT OF THE CESTAT MUMBAI ORDER

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