The present tax appeal is directed against the order dated 03.10.2011 of Customs Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad passed in Appeal No.E/3040/2006, proposing the following question as a substantial questions of law:- “(i) Whether filing of RT 12 Returns by the Respondent sufficient without filing the Declaration required under Rule 173 C of the Central Excise Rules?
(ii) Whether the extended period of limitation could have been invoked in the facts of the case under the proviso to section 11A (1) of the Central Excise Act, 1944?
(iii) Whether Customs Excise and Service Tax Appellate Tribunal was justified in arriving at a conclusion that there was no suppression on the part of the Respondent more particularly when the declaration under Rule 173 C was admittedly not filed by the Respondent?
(iv) Whether the Customs Excise and Service Tax Appellate Tribunal was right in allowing the Appeal filed by the Respondent?”
2. We heard learned advocate Mr.Amar M. Bhatt appearing for the appellant.
3. The relevant facts involved in the appeal and with reference to which the aforesaid questions are proposed, are that the respondent-assessee is engaged in manufacturing of M.S.pipes, which are excisable goods. The respondent avails Cenvat credit on inputs and capital goods used in or in relation to manufacture of final viz. M.S.pipes. Upon a visit to the factory of the respondent on 22.01.2001, the central excise officers scrutinized the records of the assessee and it was found that the respondent had delivered M.S.pipes to M/s Essar Projects Limited and to M/s Engineering Projects (India) Ltd. at the value aggregate of value of inputs viz. M.S.Plates and job work charges only. The assessee had showed removal of excisable goods at the factory gate. It was also noticed that raw- material (M.S.Plates) were supplied by M/s Essar Projects Limited. It was accordingly noticed by the Authority that the respondent had evaded the excise duty.
3.1 Thereupon a show-cause notice was issued on 24.03.2004, demanding the excise duty to the tune of Rs.12,72,350/- by invoking the extended period under Section 11-A of the Central Excise Act, 1944. Interest and penalty under Section 11 A B and 11 A C of the Act were also demanded.
3.2 The proceedings pursuant to the show- cause notice culminated into order dated 28.02.2005 of the Joint Commissioner, Central Excise, Bhavnagar confirming the excise duty of Rs.12,72,350/- and imposing penalty of the equivalent amount. Further, penalty of Rs.1,00,000/- and Rs.1,000/- under Rule-209(A) and Rule-210 of the Central Excise Rules (erstwhile) were imposed. The amount of Rs.6,26,873/- paid by the respondent was ordered to be appropriated against the total duty amount.
3.3 The assessee preferred an appeal against the aforementioned order confirming the duty and imposing penalty. The Commissioner (Appeals) by its order dated 29.05.2006 dismissed the appeal. The respondent-assessee approached the appellant Tribunal and the Tribunal allowed the appeal.
4. The issue before the Tribunal was whether there was any suppression on the part of the respondent. The case of the department was that the assessee contravened the provision of Section 173(c) of the Central Excise Rules, 1944 as necessary declaration was not filed by it. It was the further case of the department that the assessee had misdeclared the facts and thereby had depressed assessable value of the goods by not disclosing and not including the cost of free facilities provided by the supplier of inputs.
4.1 As against that, the explanation of the assessee was that the invoices themselves indicated about free issue of materials and that the cost of materials was correctly calculated on the basis of cost of pipes and the job charges. According to the assessee, the pipes were consumed by M/s Essar Steels Limited for Sardar Sarovar Drinking Water Project and hence, that could not have been considered as a sale.
5. The Tribunal, while considering the issue, found that during the relevant period, the respondent was clearing the goods under various challans- cum-invoices. Specimen challans were produced on record. They were the duty paying documents. It could be seen from the challan/ invoice that the address given therein was c/o Essar Projects Limited and the description of the goods was specifically stated as 'M.S. Fabricated pipes from your supplied free issue material' on job work basis. The Tribunal also noted that the during the relevant period, the respondent- assessee had filed necessary returns alongwith the duty paying documents.
5.1 In the above view, it cannot be gainsaid that there was a disclosure of relevant facts about the materials cleared or the goods manufactured. This aspect was considered by the Tribunal and in its impugned order, it observed as under:-
“It is also to be noted that RT12 returns to be filed during the relevant period were to be filed along with duty paying documents for the scrutiny of the authorities concerned. It that be so, it cannot be held that appellants suppressed material facts from the Revenue authorities, more so, with intention to evade duty. If the documents have been checked properly by the lower authorities, they would have definitely come to the conclusion that the appellants had no reason to suppress the manufacturing of pipes in the area/ space provided by M/s. Essar Steels Limited in order to evade payment of duty”.
5.2 Thus, from the facts and materials on record it was noticed that the scope of the work of the assessee as well as that of the M/s Essar Limited was indicated in the work order. In that light, the following observations made by the Tribunal deserve to be extracted:-
“”M/s. Essar Steels Limited agreed to provide the space and power for fabrication of pipes and water also for hydro testing of pressure of each pipe. It is also to be noted that entire pipes which were fabricated by the appellant were consumed by M/s. Essar Steel Limited for the purpose of construction of Sardar Sarovar Drinking Water Project. These pipes were not sold by M/s. Essar Limited and hence considered as captively consumed. If the goods were captively consumed, the provisions of Valuation Rules, 2000 will apply.”
6. It was on above basis and premise that the Tribunal reached the conclusion that there was no suppression on the part of the assess and that the assessee's job work of fabrication of M.S.pipes at the site provided by M/s Essar Projects Limited was within the knowledge of the Revenue, and that the show-cause notice could not have been issued as it was time barred. In the facts and circumstances, drawing of inference was not justified it could not have been inferred that there was any suppression and/ or intention on part of the respondent-assessee to evade duty.
6.1 The findings and the conclusions arrived at by the Tribunal are based on relevant materials and documents on record. The findings are in the realm of appreciation. No perversity is demonstrated. No substantial question of law arises for the consideration of this Court.
7. Accordingly, this appeal is dismissed.
[V.M.SAHAI, J.] ..mitesh..
[N.V.ANJARIA, J.]