Case Law Details
C.C.E., Mangalore Vs M/s. Pals Micro systems Ltd. (SC) – The department could not establish that there was any suppression of facts or a fraud on the part of the respondent-assessee. We find that the honest mistake committed in maintenance of stock register etc. was frankly admitted by the Managing Director of the respondent-assessee. There is no finding to the effect that there was a fraud or wilful mis-statement or suppression of facts. Thus, it is very clear that the notice was issued after expiry of the period of limitation.
Assessee, manufacturer of data processing machines was availing benefits under MODVAT scheme – Superintendent of Central Excise visited the factory premises of the assessee for verification of the stock of inputs on which assessee availed MODVAT credit and found that there was a vast difference between physical stocks available and that shown in RG23A Part 1 Register – Revenue issued show cause notice to the assessee – The Joint Commissioner confirmed the duty demand of Rs. 1,91,537/- u/r. 57I of the Rules r/w. 11A(1) of the Act – The Joint Commissioner also imposed penalty of Rs. 1,91,537/- u/s. 11AC of the Act and interest u/s. 11AB of the Act on the assessee – Commissioner dismissed appeal filed against said order – Tribunal allowed the appeal filed against said order and held that the show cause notice was issued belatedly and that too without prior permission of the Commissioner – HC dismissed appeal filed against said order – Hence, the instant appeal- Whether order of the tribunal as affirmed by the HC could be upheld? – Held, it was not in dispute that alleged suppression of payment of duty by the assessee was brought to the notice of the authority on 25.10.1996, when the Superintendent of Central Excise had inspected the premises of the assessee, whereas the show cause notice was issued on 26.06.2000 – Hence, the notice was issued after expiry of the period of limitation – Moreover, revenue could not establish that there was any suppression of facts or a fraud on the part of the assessee – Hence, impugned order upheld – Revenue’s appeal dismissed.
NON-RE PORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6058 of 2011
(Arising out of S.L.P.(C) No.13594 of 2009)
J U D G M E N T
3. Being aggrieved by the judgement and order dated 1st July, 2008 delivered in the CEA No. 59/2007 by the High Court of Karnataka at Bangalore, this appeal has been filed by the Revenue.
4. The respondent, a limited company, is a holder of Central Excise Registration and is a manufacturer of data processing machines and is also availing benefits under Modvat Scheme. On 25.10.1996, Superintendent of Central Excise visited the factory premises of the respondent-assessee for verification of the stock of inputs on which Modvat credit was availed. It was noticed that there was a vast difference between physical stocks available and that shown in RG23A Part 1 Register. The Managing Director of the respondent-assessee, in his statement dated 25.10.1996 given before the Superintendent of Central Excise, West Range, Mangalore, admitted that the actual physical stock of inputs and entries in the RG23A Part 1 Register did not tally because the respondent-assessee had removed the Modvatable inputs for sales and warranty replacements. The Managing Director of the respondent assessee also admitted the discrepancy i.e. shortage in the stock of inputs and stated that their office assistant, who was maintaining their books of accounts, was only a matriculate and being a non technical person, committed mistakes. He again stated that the mistake was also due to the clubbing of different Modvat inputs coming under the same heading. The correct figure was shown in his letter dated 21.1.1997 with all the details, admitting liability of Rs.5 1, 111/- due to the said lapses. He also conceded that, due to the aforestated mistakes, the figure of RG23A Part I did not reflect the actual quantity in stocks and enclosed a detailed worksheet showing monthly figures of opening balance, receipts, issues and closing balance for the past years.
9. In pursuance of the aforestated order, after hearing the parties, the Joint Commissioner vide his order dated 25.10.2005 confirmed the duty demand of Rs. 1,91,537/- under Rule 57 I of the Central Excise Rules, 1944, read with proviso to Section 1 1A(1) of the Act. Out of the said amount, Rs.76,1 11/- already paid by the assessee had been appropriated. Further, a penalty of Rs. 1,91,537/- was imposed u/s 1 1AC of the Act and interest u/s 1 1AB of the Act was made payable by the respondent-assessee.
10. Aggrieved by the said order dated 25.10.2005, the respondent- assessee filed an appeal before the Commissioner(Appeals) but the Commissioner(Appeals) dismissed the appeal, vide order dated 23.1.2006.
17. We have carefully gone through the facts as ascertained by the Tribunal. Upon perusal of the order of the tribunal as well the judgement delivered by the High Court, it is not in dispute that alleged suppression of payment of duty by the respondent-company was brought to the notice of the authority on 25th October, 1996, when the Superintendent of Central Excise had inspected the premises of the respondent-assessee, whereas the show cause notice was issued on 26th June, 2000. The department could not establish that there was any suppression of facts or a fraud on the part of the respondent-assessee.
We find that the honest mistake committed in maintenance of stock register etc. was frankly admitted by the Managing Director of the respondent-assessee. There is no finding to the effect that there was a fraud or willful mis-statement or suppression of facts. Thus, it is very clear that the notice was issued after expiry of the period of limitation. In the set of facts, the judgement delivered in the case of Nizam sugar (supra) would squarely be applicable. In view of the aforestated facts, we are of the view that the judgment delivered by the High Court cannot be interfered.
…………………………. J.
(Dr. MUKUNDAKAM SHARMA)
…………………………J.
(ANIL R. DAVE)
New Delhi July 29, 2011.
