The extended period of limitation under Section 11A(4) of the Central Excise Act cannot be invoked when facts are known to both the Department and the assessee, as such omissions do not amount to willful suppression with an intent to evade duty.

Per: M.M. Parthiban

This appeal has been filed by M/s Akzo Nobel India Limited, Navi Mumbai (herein after referred to, for short, as “the appellant”) assailing the Order-in-Appeal No. CSM/545/RGD-APP/2024-25 dated 30.09.2024 (hereinafter referred to, for short, as “the impugned order”) passed by the Commissioner of Central Tax (Appeals), Raigarh.

Brief facts of the case are that during the EA-2000 Audit conducted by the Department, it was noticed that the amount of sales indicated in the ER-1 Returns filed by the appellant is incorrect, as compared to the value of sales reported in their Profit & Loss (P&L) Account for the financial year 2015-16 and 2016-17, and, therefore, an objection was raised for non-payment of Central Excise duty for an amount of Rs.1,58,57,423/-, which is extracted herein below: -

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On the above basis, the Department had issued show-cause notice dated 04.12.2020 proposing for demand of Central Excise duty along with interest by invoking the extended period of limitation under the proviso to Section 11A(4) and for imposition of penalty under Section 11AC of the Central Excise Act, 1944. The said show-cause notice was adjudicated by the original authority in terms of Order-in-Original dated 22.08.2022 in confirmation of the proposals made in the show-cause notice. The appellant had filed an appeal assailing the said order of the original authority, which was disposed of by the learned Commissioner (Appeals) vide Order-in- Appeal dated 28.04.2023 by setting aside the order of original authority dated 22.08.2022, and by in remanding the matter back to the original authority for deciding the matter afresh after following the principles of natural justice and after considering the submissions to be made by the appellant. Pursuant to the said remand directions, the original authority passed Order-in-Original dated 06.11.2023 after giving a personal hearing to the appellant in the said order, the original authority had confirmed the Central Excise duty for an amount of Rs.16,20,884/- and dropped the demand of duty to an extent of Rs.1,42,36,539/-. Feeling aggrieved with the said order of the original authority to the extent it had confirmed part of the duty demand, the appellant had filed an appeal before the learned Commissioner (Appeals), who disposed of the said case vide order dated 30.09.2024, which is impugned herein, in the impugned order, learned Commissioner has upheld the order of the original authority and rejected the appeal filed by the appellant. Feeling aggrieved with the said Order-in- Appeal dated 30.09.2024, the appellant has filed this appeal before the Tribunal.

Learned Advocate for the appellant submits that the two main reasons for the difference in the figures given in profit and loss & periodical ER-1 returns, is due to the accounting treatment given for non- manufacture sales arising mainly on account sale of packing materials scrap, in which the raw materials were purchased by them. Second reason is an adjustment of opening and closing balance of sales at the year end of March, as required by the accounting principles laid down under the accounting standards of India. Further, the difference of Rs,77,42,912/- for the year 2015-16 (mainly December 2015 to March, 2016) was considered by the appellant in their next ER-1 return of April, 2016. Accordingly, its effect was shown in the next ER-1 return, by which value of ER-1 (2016-17) shown excess as compared with their actual financial sales.

Learned Authorized Representative appearing for the Revenue reiterates the findings recorded by the learned Commissioner (Appeals) in the impugned order.

Heard both sides and perused the case records.

On careful perusal of the case records, it is found that an amount of Rs.16,28,884/- has been confirmed by the original authority, which has also been upheld by the learned Commissioner (Appeals) on account of the difference in value of sales/net turnover indicated in