Full Judgment Text
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CASE NO.:
Appeal (civil) 5305 of 2005
PETITIONER:
M/s Geo Tech Foundations & Construction
RESPONDENT:
Commnr. Of Central Excise, Pune
DATE OF JUDGMENT: 07/03/2008
BENCH:
Dr. ARIJIT PASAYAT & P. SATHASIVAM
JUDGMENT:
J U D G M E N T
CIVIL APPEAL NO. 5305 OF 2005
(With Civil Appeal No.2383/2006)
(With Civil Appeal No.2385/2006)
(With Civil Appeal No.7412/2005)
(With Civil Appeal No.7621/2005)
(With Civil Appeal No. 1330/2008)
Dr. ARIJIT PASAYAT, J.
Civil Appeal Nos. 5305/2005, 7412 and 7621/2005
1. These appeals are directed against separate judgments of
the Customs, Excise and Service Tax Appellate Tribunal,
Mumbai Central (in short ’CESTAT’) . The factual background
needs to be noted in brief.
2. Factual scenario is noted in respect of Civil Appeal
No.5305 of 2005. But the conclusions on the legal issues will
cover the other appeals.
3. Appellant manufactures PSC girders at site to be used in
the construction of Railway Bridge for Konkan Railways. The
period involved is June 1994 to February, 1995. These articles
were cleared without payment of central excise duty under
Central Excise Act, 1944 (in short the ’Act’). A show cause
notice was issued on 8.5.1996 and the appellant was asked to
show cause as to why duty amounting to Rs.53,91,498/-
should not be demanded from it, as the girders were cleared
without payment of duty, why they should not be confiscated
and why penalty should not be imposed on the person
concerned.
4. The Commissioner adjudicated the case demanding duty
and confiscating the girders which were by then removed to be
placed on the bridge and imposed penalties.
5. The stand of the appellant before the CESTAT was that
the show cause notice was barred by limitation, inasmuch as
it was issued beyond the statutory period of 6 months as
provided at the relevant time. Further, the department had
knowledge of the fact that the appellant manufactured PSC
girders in 1994 itself. The show cause notice was issued in
1996 i.e. after the period of limitation. It was further
submitted that even on merits there was no scope for
demanding duty. In the alternative, it was pleaded that there
was no marketability of PSC girders and since the girders are
not marketable, therefore, the question of levying any excise
duty under the Act did not arise.
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6. The CESTAT held that the larger period of limitation was
available. On the question of marketability the matter was
referred to a larger Bench of the CESTAT.
7. In C.A. Nos.7412/2005 and 7621/2005, challenge is to
the final order of CESTAT rendered by a larger Bench holding
that the benefit of Notification No.59/90-CE cannot be
extended to PSC girders as they are goods which are not
manufactured at site for construction of buildings. Therefore,
the articles were held to be subject to excise duty.
8. In support of the appeals, Mr. Joseph Vellapally, learned
senior counsel for the appellant submitted that two appeals
were decided by CESTAT on the question of manufacture. One
related to the present appellants and the other to M/s Asian
Techs. Ltd. Correctness of the judgment in M/s Asian Techs.
Ltd. was considered by this Court in Larsen & Toubro Ltd. v.
Commissioner of Central Excise, Pune-II (2007 (211) E.L.T.
513 (S.C.). This Court held that since there was bona fide
doubt as to whether the activities carried on amounted to
manufacture or not, same was a debatable issue and the
questions were answered differently by different Benches and,
therefore, the extended period of limitation in terms of Section
11-A of the Act cannot be applied.
9. It is to be noted that in the facts of the present case,
earlier notice was issued which was withdrawn and the second
notice was issued on 8.5.1996. Prior to the amendment by Act
10 of 2000 w.e.f. 12.5.2000 the extended period of limitation
was one year. After the 2000 amendment the period has
become 5 years.
10. Admittedly, when the first show cause notice was issued,
the extended period of limitation was not resorted to. A notice
should ordinarily be issued within a period of six months (as
the law then stood) i.e. within the prescribed period of
limitation but only in exceptional cases, the said period could
be extended to one year or five years, as the case may be.
When in the original notice, such an allegation had not been
made, we are of the opinion that the same could not have been
made subsequently as the facts alleged to have been
suppressed by the appellant were known to them.
11. In P & B Pharmaceuticals (P) Ltd v. Collector of Central
Excise (2003 (153) E.L.T.14 (S.C.) this Court held as under:
"19. However, Mr. Jaideep Gupta submits that
the Tribunal did not accept that here has been
assignment of logo in favour of the assessee.
We are unable to accept the contention of the
learned counsel. The tenor of the order, "the
assessee had produced certain documents
such as registration form, trade mark
authorities assigning the trade mark to them
but the fact remains that there was material
evidence by way of seizure of goods
manufactured by M/s P & B Laboratories
bearing the same logo much after the alleged
transfer of trade mark to the appellants’
discloses that the Tribunal accepted that there
has been an assignment but proceeded to deal
with the case of inapplicability of the
exemption under the notification on the
ground that the logo was being used by M/s P
& B Laboratories also. We have already
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indicated above that use of logo of the
manufacturer by third parties is alien for
purposes of denial of exemption on the
strength of Para 7 of the notification. In this
view of the matter, we are unable to uphold the
order of the Tribunal denying the exemption to
the assessee.
20. In any event, the ground that the
assessee has suppressed the fact that M/s P &
B Laboratories was also using the logo for
availing the benefit under the notification
cannot be a valid reason to invoke the proviso
to Section 11A of the Act. There is no
obligation on the owner of a logo to make a
roving enquiry to ascertain whether any other
person is also using his logo and disclose it to
the authorities to avert a possible allegation of
suppression of fact for purposes of invoking
the proviso."
12. One further aspect cannot be lost sight of. The appellant
as well as Konkan Railways raised a definite plea of bona fide.
Such a plea had not been rejected. On the contrary, as noted
above, there was diversion of views and the issue was
answered by different Benches of the CESTAT. That being so,
the extended period of limitation could not have been invoked.
As the facts alleged to have been suppressed by the appellant
were known to the department, in that view of the matter the
extended period of limitation under Section 11-A of the Act
has no application. Invocation of Section 11-A, was
impermissible, and therefore, we set aside the order of
CESTAT which is the subject matter of challenge in Civil
Appeal No.5305 of 2005. The appeal is allowed.
13. In view of the conclusions in C.A.5305 of 2005 there is
no need to consider the question of marketability and/or
excisability. The issue is academic. In view of the decision in
connected Civil Appeal No.5305 of 2005, Civil Appeal
Nos.7412 of 2005 and 7621 of 2005 are allowed.
Civil Appeal 1330/2008
14. The show cause notice was issued on 30.5.1996. In view
of what has been decided in C.A. No.5305/2005, the appeal
deserves to be dismissed only on the ground of limitation.
Civil Appeal No.2383/2006
15. The dispute relates to the period from April 1993 to July,
1993. A show cause notice was issued on 8.5.1996. In view of
what has been stated in C.A.No.5305 of 2005 decided today,
the appeal deserves to be dismissed only on the ground of
limitation.
Civil Appeal No 2385 of 2006
16. The period involved is November, 1993 to December,
1994 and the show cause notice was issued on 3.12.1996. In
view of what has been stated in C.A.No. 5305 of 2005 decided
today, this appeal deserves to be dismissed which we direct.