The main legal point established is that wilful mis-statement or suppression of facts with the intention to evade payment of duty must be proven for invoking the extended period of limitation under Section 11A(1) of the Central Excise Act, 1944.

JUDGMENT

A.S. Chandurkar, J. - This appeal under Section 35G of the Central Excise Act, 1944 (for short, "the said Act") was admitted on 9.3.2017 on the following substantial question of law :

2. The facts relevant for answering the aforesaid substantial question of law are that it is the case of the appellant that it is engaged in the manufacture of mechanical gates, parts and hoists that are required to be installed on dam constructed by the Government of Maharashtra. The work of construction of dams was undertaken by the Irrigation Department and as a part of that, the gates and hoists manufactured were supplied to the said Department. These goods were exempt from payment of excise duty in view of the exemption Notification No.74/1993 dated 28.2.1993. On 1.4.1996 Maharashtra Act No. XV of 1996 was enacted and the Vidarbha Irrigation Development Corporation was formed under that Act. According to the Revenue, the appellant lost benefit of exemption under Notification No.74/1993. With regard to the goods cleared for the period commencing from 1997-1998 to 2000-2001 a show cause notice was issued by the Office of the Directorate General of Central Excise Intelligence calling upon the appellant to show cause why central excise duty of Rs.29,17,879/- should not be demanded under Section 11A(1) of the said Act. Interest under Section 11AB as well as penalty under Section 11AC of the said Act was also sought to be imposed. This show cause notice was served on the appellant on 8.5.2001.

3. Reply was given by the appellant to the aforesaid show cause notice on 15.1.2002 in which it was stated that the appellant was a State Government Department and there was no transaction entered concerning payment of excise duty. There was no intention to evade payment of central excise duty. On this count, it was stated that the show cause notice be dropped. An order dated 25.3.2003 came to be passed by the Commissioner in which the show cause notice was confirmed and the amounts mentioned in the said notice were held to be recoverable from the appellant.

4. The appellant, being aggrieved by the aforesaid adjudication, filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (for short, "the Tribunal"). After hearing both sides the Tribunal on 31.1.2011 partly allowed that appeal by maintaining the demand of duty under Section 11A(1) as well as penalty imposed under Section 11AC of the said Act. The penalty imposed under Rule 173Q of the Central Excise Rules, 1944 (for short, "the said Rules") was, however, set aside. Being aggrieved by the aforesaid adjudication the appellant has preferred this appeal.

5. Smt. Sharda Wandile, learned counsel for the appellant submitted that the proviso to Section 11A(1) of the said Act had been wrongly invoked by the revenue for demanding central excise duty for the period beyond one year. The proviso under Section 11A(1) of the said Act could be invoked only if there was any wilful mis-statement or suppression of facts with an intention to evade payment of duty. There was no material on record either before the Commissioner or before the Tribunal on the basis of which it could be said that the appellant had an intention of evading payment of duty. According to her, prior to 1.4.1996 the Department was entitled for exemption from payment of central excise duty in view of the exemption Notification bearing No.74/1993. The Corporation was established on 1.4.1996 and the appellant was under bona fide belief that being a Corporation constituted to discharge functions of the State, the exemption which was earlier granted continued to operate. The appellant was under such bona fide belief and immediately after being served with the show cause notice the appellant had registered itself with the concerned Excise Department. It was submitted by referring to the statement of facts that were annexed to the show cause notice that in the year 2000-2001 no excise duty was payable. The show cause notice pertain