Mathur Corr-Tech Pvt. Ltd vs Commissioner Of Central Excise

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.E/1251/2004

[Arising out of Order-in-Appeal No.266/2004-CE dt.12.8.2004 passed by the Commissioner of Central Excise (Appeals), Coimbatore]

Mathur Corr-Tech Pvt. Ltd. Appellant

Versus

Commissioner of Central Excise, Coimbatore Respondent

Appearance:

Shri M. Saravanan, Consultant For the Appellant

Shri R. Subramaniyan, AC (AR) For the Respondent

CORAM :

Honble Shri D.N. Panda, Judicial Member Honble Shri R. Periasami, Technical Member

Date of Hearing/Decision : 8.1.2015

FINAL ORDER No.40036/2015

Per D.N. Panda

Ld. consultant submits that there is no dispute as to the goods manufactured by the appellant which is also governed by the Standards of Weights & Measures Act, 1976 and notified under Section 4 of Central Excise Act, 1944 for liability of duty thereunder. Apart from clearing the goods in small packs on retail, the appellant was also clearing the goods in bulk pack for industrial use. Such bulk packed goods have been brought to the purview of levy under section 4 of the above Act, by the adjudication order.

2. He submits that whether such bulk pack clearances shall be liable to duty under section 4 or 4A was under confusion in the industry for a long time. That persisted till 28.2.2002 and was resolved by Board's Circular No.625/16-2002 dt. 28.2.2002 clarifying that such clearances are liable to duty under Section 4 of Central Excise Act, 1944.

2. While the appellant was clearing the goods u/s 4A of the above Act, in December'98, it wrote a letter to the department for clarification as to the section under which levy shall be made. In March'99, the department asked for documents of the appellant for examination.

3. Appellant was all along under bonafide belief that because of the confusion in the industry the goods were not liable to duty on the bulk pack clearances under Section 4 of Central Excise Act, 1944. Such bonafide belief led it to pay duty under Section 4A of Central Excise Act, 1944. There was nothing suppression made by the appellant to cause evasion to the Revenue. He relies on the decision in the case of Jaiprakash Industries Ltd. Vs CCE Chandigarh  2002 (146) ELT 481 (SC) to support his contention that adjudication is time barred and prays that the appeal may be allowed.

4. Revenue supports the adjudication on the ground that it was known to the appellant that the goods are notified under Section 4A of Central Excise Act, 1944 in so far as that relates to retail packs only. Bulk packs were not liable to Section 4A but liable to duty under Section 4. The Standards of Weights & Measures Act is also clear that commercial packs are not governed by section 4A of the above said Act.

5. Heard both sides and perused the records.

6. The short question in this appeal is whether the conduct of the appellant can be appreciated to be bonafide and it was under such belief in the light of the Board's circular. The circular has ground that there was persisting confusion in industry which has prevented the appellant to bring the goods under Section 4A of Central Excise Act, 1944. In view of the fact that there is no whisper in the show cause notice as to malafide of appellant, it would be proper to rely on the decision cited by learned consultant in the case of Jaipraksh Industries Ltd. (supra). For convenience of reading, para-6 of the judgement is reproduced below :-

"6. We will first take up the second question. The law on this point is well-settled. In the case of Padmini Products v. Collector of Central Excise reported in 1989 (43) E.L.T. 195 (S.C.), this Court has held that wherever there is the scope for believing that the goods are not excisable to duty and, therefore, no licence is required to be taken out, then the extended period of limitation for demand under Section 11A is inapplicable. This Court has held that mere failure or negligence on the part of the manufacturer in not taking out a licence and in not paying duty does not attract the extended period of limitation. This Court has held that there must be evidence to show that the manufacturer knew that the goods were liable to duty and that he was required to take out a licence. This Court has held that for invoking the extended period of limitation duty should not have been paid, short levied or short paid or erroneously refunded because of either fraud, collusion, wilful mis-statement, suppression of fact or contravention of any provision or rules. This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful mis-statement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limitation."

7. Having noticed that appellant has not acted malafide and its bonafides has come to public record, appeal is allowed.

(Dictated and pronounced in open court)

(R. PERIASAMI) (D.N. PANDA) TECHNICAL MEMBER JUDICIAL MEMBER

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