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2024 Supreme(Online)(CESTAT) 194
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, CJ, P.V. Subba Rao, J
KANORIA ENERGY AND INFRASTRUCTURE LTD – Appellant
Versus
COMMISSIONER OF CENTRAL EXCISE & CGST-UDAIPUR – Respondent
E/50983/2021
The court held that mere non-payment of excise duty does not constitute suppression of facts; deliberate intent to evade payment must be established for invoking the extended period of limitation.
Headnote:(A) Central Excise Act, 1944 - Sections 11A(1), 11AC, and 11AB - Excise duty demand - The Commissioner disallowed exemption under Notification No. 06/2002-CE and confirmed a demand of Rs. 11,02,12,141/- for non-payment of duty on asbestos cement pipes, imposing penalties on various individuals - The appellant contended that they maintained proper records and did not suppress facts regarding the use of fly ash - The court found that the extended period of limitation could not be invoked as there was no deliberate suppression of facts. (Paras 1, 2, 24, 60)
(B) Limitation - The court emphasized that mere non-payment of duty does not equate to suppression of facts; there must be a deliberate intent to evade payment for the extended period of limitation to apply. (Paras 46, 60)
Facts of the case:
The appellant, engaged in manufacturing asbestos cement pipes, claimed exemption under Notification No. 06/2002-CE based on the use of fly ash. The Commissioner issued a show cause notice alleging manipulation of records and confirmed a demand for excise duty along with penalties.
Findings of Court:
The court found that the appellant had not suppressed facts and that the extended period of limitation was improperly invoked.
Issues: Whether the appellant suppressed facts with intent to evade duty and whether the extended period of limitation was applicable.
Ratio Decidendi: The court ruled that the burden of proof lies with the department to establish deliberate suppression of facts, which was not demonstrated in this case.
Result: The impugned order was set aside, and the appeals were allowed.
FINAL ORDER NO’S. 58092-58097/2024
JUSTICE DILIP GUPTA:
Excise Appeal No. 50983 of 2021 has been filed by Kanoria Energy & Infrastructure Ltd. (the appellant) (formerly known as M/s. A. Infrastructure Ltd.) to assail the order dated 31.03.2021 passed by the Commissioner in so far as it is against the appellant.
2. The operative part of the order dated 31.03.2021 is reproduced below:
“69. In view of the above discussion I pass the following order:
ORDER
(i) I disallow the benefit of exemption notification No. 06/2002-CE dated 01.03.2002 as amended in respect of the clearances of excisable goods during the period December, 2003 to March, 2006.
(ii) I confirm the demand of Central Excise duty amounting to Rs. 11,02,12,141/- (Rupees eleven crores two lakhs twelve thousand one hundred and forty one only) not paid by the assessee for the clearance of excisable goods in the guise of exempted goods during the period December, 2003 to March, 2006 in terms of the provision to Sub-section (1) of section 11A of the Central Excise Act, 1944 .
(iii) I impose penalty of Rs. 11,02,12,141/- (Rupees eleven crores two lakhs twelve thousand one hundred and forty one only) on the assessee under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002.
(iv) I order for recovery of interest under the provisions of Section 11AB of the Central Excise Act, 1944 on the amount of duty demanded.
(v) I impose penalty of Rs. 10,00,000/- (Rs. Ten Lacs Only) on Shri Sanjay Kanoria Managing Director/vice Chairman of M/s. A. Infrastructure Ltd. Hamirghrh, Bhilwara Rajasthan under Rule 26 of the Central Excise Rules, 2002.
(vi) I impose penalty of Rs. 10,00,000/- (Rs. Ten Lacs Only) on Shri V. K. Gupta, Chief General Manager of M/s. A. Infrastructure Ltd. Hamirghrh, Bhilwara Rajasthan under Rule 26 of the Central Excise Rules, 2002.
(vii) I impose penalty of Rs. 5,00,000/- (Rs. Five Lacs Only) on Shri Darpan Jain, Proprietor, M/s. Kaka Roadlines, Kota, Rajasthan under Rule 26 of the Central Excise Rules, 2002.
(viii) I impose penalty of Rs. 5,00,000/- (Rs. Five Lacs Only) on Shri Parasmal Mehta Prop Proprietor, of M/s. Robin Roadways, Bhilwara, Rajasthan under Rule 26 of the Central Excise Rules, 2002.
(ix) I impose penalty of Rs. 5,00,000/- (Rs. Five Lacs Only) on Shri Jai Kumar Singhvi, Proprietor, of M/s. Sanghvi Transport, Nimbahera, Rajasthan under Rule 26 of the Central Excise Rules, 2002.”
(emphasis supplied)
3. Excise Appeal No. 51686 of 2021 has been filed by Darpan Jain, Proprietor of M/s. Kaka Roadlines, Kota for quashing the order dated 31.03.2021 in so far as it imposes penalty of Rs. 5,00,000/- on him under Rule 26 of the Central Excise Rules, 2002(the Central Excise Rules).
4. Excise Appeal No. 51707 of 2021 has been filed by Parasmal Mehta, Proprietor of M/s. Robin Roadways for quashing the order dated 31.03.2021 in so far as it imposes penalty of Rs. 5,00,000/- on him under Rule 26 of the Central Excise Rules.
5. Excise Appeal No. 51708 of 2021 has been filed by Jai Kumar Singhvi, Proprietor of M/s. Sanghvi Transport for quashing the order dated 31.03.2021 in so far as it imposes penalty of Rs. 5,00,000/- on him under Rule 26 of the Central Excise Rules.
6. Excise Appeal No. 51770 of 2021 has been filed by V. K. Gupta, Chief General Manager of the appellant for quashing the order dated 31.03.2021 in so far as it imposes penalty of Rs. 10,00,000/- on him under Rule 26 of the Central Excise Rules.
7. Excise Appeal No. 51771 of 2021 has been filed by Sanjay Kanoria, Managing Director/Vice Chairman of the appellant for quashing the order dated 31.03.2021 in so far as it imposes penalty of Rs. 10,00,000/- on him under Rule 26 of the Central Excise Rules.
8. The appellant is engaged in the manufacture of Asbestos Cement Pressure Pipes & Couplings (AC Pressure Pipes). AC Pressure Pipes are manufactured by employing two processes namely „Mazza Process‟ and „Magnani Process‟. Asbestos fibre, cement, and fly-ash are the three basic r
