Judgment:
1. The appeal is against the order of the Additional Collector, Central Excise, Rajkot confirming the demand of duty issued to the appellants and imposing a penalty under rule 173Q.2. The Advocate for the appellant contends that the appellant was engaged in the manufacture of cement blocks, cement pipes and cement collars from 1949. The said goods became excisable for the first time in the year 1975. Appellant thereafter applied for licence.
Subsequently, the appellant did not pay duty during the period 1985-86 and 1986-87 and it is for this period that the duty has been demanded.
She contends that appellant did not pay duty because it was under the impression that it was entitled to the benefit of Notification Nos.
7/85-C.E., dated 17-3-1985 and 175/86-CE., dated 1-3-1986. It was not aware that the ceiling for exemption had been removed and the department has not advised it of such a change. She, therefore, contends that the appellant did not have the intention to evade duty.
She further explains that the appellant applied for licence and commenced paying duty in 1988. She refers to the judgments of the Supreme Court in Tamil Nadu Housing Board v. C.C.E., Madras -1995 Supp (1) SCC 50; C.C.E., Hyderabad v. Chemphar Drugs and Liniments -(1989) 2 SCC 123; Padmini Products v. C.C.E., Bangalore - (1989) 4 SCC 275 and the decision of the Tribunal in Arva Cabinet House v. Collector of Central Excise 3. It cannot be denied that the failure by the appellants to pay duty for the period in question was entirely on account of its wrongly availing of an exemption to which it was not entitled. There is no duty cast upon the department to ensure that the assessee was informed of its liability to pay duty for the period in question on account of any change in the law. It is a well-known principle of law that ignorance of law is no excuse. As the Additional Collector in his order has held, the appellants has not shown that it made any effort to discover, by making enquiries with the department whether it was liable to duty. The appellant had not applied for a Central Excise licence. There is nothing to show that the appellant made least efforts to verify the law position. The fact emphasised by the Additional Collector, that the appellant earlier was paying duty, is also significant. In these circumstances, it is not possible to agree that there was no intention to evade duty. On the contrary, the appellant had not furnished the details specified by law, which were necessary before it availed of the notifications. The judgment of the Supreme Court cited by the appellant related to facts, which are distinct from those in the present case.
The Tribunal's decision in Arva Cabinet House v. C.C.E., referred in paragraph 15 to the fact that show cause notices issued to the appellant Arva Cabinet House did not make any allegation of misdeclaration or suppression of facts. In these facts and circumstances, we consider that the extended period in the proviso to Section 11A (1) was available to the department. We, therefore, hold that the order demanding duty and penalty does not call for interference.