S.A. Bobde, J.@mdashMr. Ferreira, learned Assistant Solicitor General for the appellant, seeks leave to amend the appeal. Leave granted. Amendment to be carried out forthwith.
2. Heard learned Counsel for the parties.
3. This appeal by the Commissioner of Central Excise questions the order dated 27-9-2005 [2006 (197) E.L.T. 393 (Tri.-Mum.)], by which the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has upheld the order of the Commissioner that the claim of the Revenue is time-barred.
4. A Show Cause Notice dated 10-2-1999 was issued by the Deputy Commissioner of Central Excise, Customs House, Panaji, Goa to the respondent-Company alleging as follows :-
(a) That the assessee availed of modvat credit amounting to Rs. 1,25,917/- in contravention to Rule 57Q(2) of Central Excise Rules, 1944, which provided no credit of the specified duty paid on capital goods could be allowed if such duty has been paid on capital goods before 1st March, 1994;
(b) That the assessee availed Modvat credit amounting to Rs. 57,775/-, despite the fact that as per Notification No. 16/94-C.E. (NT.), dated 30-03-94, no credit could be availed after 30-6-1994 on the gate passes issued prior to 1-4-1994; and
(c) That the assessee availed credit twice of duty amounting to Rs. 17,618/- on invoice no. 47 dated 5-4-1994, vide Entry No. 21, dated 6-6-1995 and once again vide entry no. 60 dated 6-6-1995 in RG-23C (Part II) account.
The allegation was that the aforesaid illegal claims were made by the assessee on 6-6-1995.
5. For the aforesaid claims made on 6-6-1995, the Revenue issued a show cause notice on 10-2-1999. The assessee replied to the said show cause notice and claimed that they were barred by limitation since the assessee had not hidden facts.
6. The Additional Commissioner of Customs and Excise, confirmed the demand of Rs. 1,25,917/-, under (a) above. He also confirmed the demand of Rs. 17,618/-, under (c) above for taking credit twice. However, he did not confirm the demand with regard to Rs. 57,775/-, under (b) above.
7. The Commissioner (Appeals-II), Central Excise and Customs, in the appeal, upheld the order of the Additional Commissioner of Customs, to inadmissibility of the credit and held that the show cause notice was barred by limitation.
8. The second appeal preferred by the appellant was dismissed by the CESTAT and hence this appeal.
9. Mr. Ferreira, learned Assistant Solicitor General for the appellant, submitted that wrongful claims were made by the assessee for which notice was issued after a period of four years on 10-2-1999. The show cause notice itself cannot be held to be barred by limitation in view of the provision of Section 11A of the Central Excise Act, 1944 which reads thus :
Section HA. - Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non-levy or non-payment, short-levy or short-payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made there under, a Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice :
Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilfull misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty, by such person or his agent, the provisions of this subsection shall have effect, as if the words one year, the words "five years" were substituted :
Explanation. - Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of [one year] or five years, as the case may be.
(1A) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud, collusion or any wilfull misstatement or suppression of facts, or contravention of any of the provisions of this Act or the rules made there under with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to sub-section (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon u/s 11AB and penalty equal to twenty-five per cent of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice.
10. Mr. Ferreira, learned Assistant Solicitor General for the appellant, relied on the proviso to the aforesaid Section wherein limitation can be extended where duty has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud, collusion or any wilfull mis-statement or suppression of facts, or contravention of any of the provisions of this Act or the rules made there under with intend to evade payment of duty.
The learned Counsel further relies on the Judgment of the Supreme Court in the case of
12. Section 11A of the Act empowers the central excise officer to initiate proceedings where duty has not been levied or short levied within six months from the relevant date. But the proviso to Section 11A(1), provides an extended period of limitation provided the duty is not levied or paid or which has been short-levied or short-paid or erroneously refunded, if there is fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty. The extended period so provided is of five years instead of six months. Since the proviso extends the period of limitation from six months to five years, it needs to be construed strictly. The initial burden is on the department to prove that the situation visualized by the proviso existed. But the burden shifts on the assessee once the department is able to produce material to show that the appellant is guilty of any of those situations visualized in the Section.
11. Having regard to the ratio of the decision supra, we find that the CESTAT was not entitled to hold that the show cause notice was time-barred with regard to the demand at (c) above, namely that the respondent availed credit twice of duty amounting to Rs. 17,618/- on Invoice No. 47 dated 5-4-1994 vide entry No. 21 dated 6-6-1995 and once again vide entry No. 60 dated 6-6-1995 in RG-23C (Part-II) account.
12. Prima facie, the claim of the appellants appears to be that this availing of credit twice on two invoices of the same date indicates at least a willful mistake or suppression of facts, if not a fraud. In this view of the matter, we are inclined to set aside the order of the CESTAT, in regard to demand referred at (c) above and hold that the show cause notice could be treated as barred by limitation. We accordingly set aside the order of the CESTAT to the extent indicated above and remand the matter back to the Additional Commissioner of Customs and Central Excise, for determination as to the validity of the demand in relation to the double availing credit indicated at (c) above. The Additional Commissioner of Customs and Central Excise, shall finally determine the issue of limitation, according to the facts found and in accordance with law.
13. The appeal stands disposed of accordingly. No order as to costs.
