Judgment:
1.The appellants were engaged in the manufacture of Cylinders. Those cylinders were supplied to M/s. Indian Petroleum Corpn. Ltd., M/s.
Bharat Petroleum Corpn. Ltd. and Hindustan Petroleum Corp. These sales were evidenced by contracts entered into between manufacturer on one side and the oil companies on the others. In terms of those contracts, the goods were sent by the manufacturer by road for delivery at the buyer's premises. Cylinders os sold buy road were insured by the manufacture in their own name the freight charges were reimbursed. For the purpose of paying duty on cylinders, the right and insurance charge realised from oil companies were not added. Consequently, Show Cause Notices were issued emending differential duty reckoning the freight and insurance chages which should have been added to the value of the cylinders. Differential duty so claimed was in relation to the Cylinders cleared for the period from 28.9.96 to 31.3.98. The amount of duty claimed was Rs.11,64,551/-.
2. The manufacturer of gas cylinders, appellant before us, disputed the claim on the ground that the clearance of other cylinder took place at the factory gate; that all expenditure incurred till that time were reckoned for the purpose of computing duty and that insurance charges and freight which were rembursed for cylinders at the premises of the oil company, cannot form part of assessable value. It was also contended that there was no suppression of facts, much less walful, to evade payment of duty. Therefore, the propriety of invoking the provisions of proviso to Section 11A(1) was questioned.M/s. Escorts JCB Ltd. vs CCE -2000(118)ELT.650 confirmed by the Larger Bench of this Tribunal in the case of Prabhat Zaroa Factory Ltd. vs CCE, New Delhi -2000(38)RLT.637, it has to be held that in computing the duty on gas cylinders, insurance and freight should be reckoned. Thus this issue having been decided against the appellant's contentions as per the above mentioned decision, we find no merit on this point.
4. Ld. Counsel representing the appellant argues that the SCN is devoid of statements warranting invocation of the extended period of limitation provided by proviso to Section 11A(1) of Act. According to Counsel the averments made in the SCN are 'misdeclared the place of removal at factory gate instead of buyer's/agent's premises. Therefore, proviso to Section 11A(1) is attracted for extended period of five years for demanding duty'. On these averments only the appellant herein was added to show cause why the extended period of five years should not be invoked under proviso to Section 11A(1) of the Central Excise Act for demanding Central Excise Duty beyond six months. Further statement that the party misled for suppressed to the facts are also not helpful to the department.According to Counsel thee averments in the SCN are not sufficient for invoking the extended period of limitation. In support of this argument, reference was made to the decision of the Apex Court in the case of CCE vs HMM Ltd. reported in 1995(76)ELT.497. In that case the Lordship observed.
If the Department proposes to invoke the proviso to Section 11A(1), the show cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have not opportunity to meet the case of the department /the default s enumerated in the proviso to the said sub-section are more than one and if the excise department placed reliance on the proviso it must be specifically stated in the show cause notice which is the alligation against the assessee falling within the four corners of the said proviso".
5. When the SCN issued in this case is examined in the light of the above statement of law made by the Apex Court, we are clear in out mind that the SCN does not allege any of the reasons mentioned in the proviso for invoking the extended period . no averment is made to the effect that any fact was wilfully suppressed with the intent to evade payment of duty. Therefore, there was no justification for the authorities below to invoke the extended period beyond six months.
6. A SCN was issued on 7.8.98. The demand was in relation to the clearance effected from 28.9.98. Except for a short period in early 1998 all the periods fell beyond six months of 1998 fell within the period of six months of 1998 fell within the period of six months. In respect of such clearance, differential duty is leviable.For assessing the defferntial duty in relation to the clearance effected during the said three months, the matters remitted back to the concerned jurisdictional authority. The jurisdictional authority will decide the issue expeditiously within for months from,the date of receipt of this order.
7. Appeal No.E/3326/2000-A is at the instance of the Revenue questioning the reduction of penalty.The Commissioner in the impugned order was following the orders pronounced by this Tribunal. He cannot be faulted in doing os.So there is no substance in this appeal. Further in the instant a case since we have found that Department has not substantiated grounds for invoking the extended period in terms of proviso to Section 11A(1), no penalty under Section 11AC could have been imposed. in that view of the matter also the contention raised by the Revenue in this appeal has to fail. The appeal is accordingly dismissed.