By TIOL News Service

CHENNAI, JUNE 29, 2015: THE appellants manufacture tractor parts, parts of earth moving equipment, steel tables and chairs. They crossed the small scale exemption limit of Rs. 50 lakhs during the year 1998-99 and 1999-2000. They claimed that due to a bonafide mistake they omitted to pay the central excise duty during the relevant years but there was no suppression. After their Accounts Executive realized in April, 2000 that the exemption limits have been crossed for the previous two years, he informed the same to the Managing Director and thereafter, the jurisdictional Dy. Commissioner's Office was approached in the first week of May 2000 and details of the turnover was given. Subsequently, as required by the excise authorities, further details were submitted but the impugned Show Cause Notice has only been issued on 08.01.03. The appellants plead that the demand of duty is time barred and no interest and penalties are leviable because no timely show cause notice has been issued despite the appellants voluntarily giving the information in the first week of May, 2000, about the clearances beyond exemption limit.

The Adjudicating Authority, the Commissioner (Appeals) and the Tribunal held against the assessee and they are now before the High Court against the order of the Tribunal.

After hearing both sides, the High Court held:

The substantial question raised by the appellant that the Tribunal ought to have set aside the demand holding that the extended period of limitation will not arise in its case, has been considered and held by the Tribunal on the plea of suppression of production in excess of small scale exemption limit and there has been failure on the part of the appellant to discharge the duty liability on clearance in excess of the exempted production. The adjudicating authority, the Commissioner (Appeals) as well as the Tribunal concurrently have come to the clear conclusion that it is a case of suppression and, therefore, this Court finds no reason to differ with the well considered finding of fact recorded by the authorities below, in the absence of any material to the contrary.

As has been rightly pointed out by the Tribunal in its order that subsequent information by the assessee to the respondent/Department cannot justify a plea of no suppression. The act of suppression had already happened at the time of clearance of the exempted goods in excess of the exemption limit and, therefore, it is not open to the assessee to plead a case of no suppression. In such view of the matter, this Court finds no infirmity in the order passed by the authorities below warranting interference in this appeal. Accordingly, the substantial question of law is answered against the appellant/assessee and in favour of the respondent/Department.

(See 2015-TIOL-1506-HC-MAD-CX)