M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING BATHPA HIMACHAL PRADESH versus COMMNR. OF CENTRAL EXCISE, CHANDIGARH-I

Citation: [2007] 9 S.C.R. 554 · Decided: 29-08-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
MIS CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, 
NA THPA HIMACHAL PRADESH 
v. 
COMMNR. OF CENTRAL EXCISE, CHANDIGARH-I 
B 
AUGUST 29, 2007 
(DR.ARIJIT?ASAYAT ANDS.fl. KAPADIA,JJ.I 
Central Excise Act, 1944-s. J IA-Manufacture of Mix Concrete-
C Excis,e duty-Demand of-Alleging that the m~nufacture was of Ready Mix 
Concrete (RMC)-Jn respect of financial year 1997-1998-:-Penalty imposed-
Plea of manufacturer that extended period of limitation not available-
Demand confirmed by· Tribunal-On appeal, held: Duty not liable to be . 
levied-Since the adjudication was beyond normal period of limitation and 
extended period of limitation was not available to the Revenue- b; the facts 
b of the case, there was scope of entertaining doubt about the view to be taken 
regarding levy· on the good-When Revenue invokes extended period of 
limitation, burden to prove. suppression of fact is cast upon it-Central 
Excise Tariff Act, 1985-Schedule, Chapter Heading No.3824.20-Central 
£,xcise Rules, 1944-r. 209A. 
E 
Words and Phrases-'Suppresion'- Meaning of-:-ln the context of s. 
11 A of Central Excise Act, 1944. 
( 
Appellants-constructions companies were manufacturing Mix Concrete 
Revenue demanded excise duty on the concrete alleging that the companies 
were manufacturing Ready Mix Concrete (RMC) and not Mix Concrete and 
F the same fell under Chapter Heading No.3824.20 of the Schedule to the · 
-( 
Central Excise Tariff Act, 1985. Revenue relied on Circulars dated 23.5.1997 
and 19.12.1997. The duty was confirmed by the Revenue and penalty was also 
imposed. 
G . 
Appellants took the plea that extended period of limitation under Section 
1 lA of Central Excise Act was not available. But the adjudicating authority, 
rejecting the plea, confirmed the demand. 
In appeal CEGAT did not accept the plea of non-availability·of extended 
.-:;., 
period of limitation and confirmed the demand of duty. 
H 
554 
CONTINENTALFOUNDATIONJOINTVENTURESHOLDING,NATHPA1·.C.C.E. 
555 
In appeal to this Court, appellants contended that there was no clarity A 
or unanimity in the views expressed by the authorities; that there were various 
Circulars operating at different points of time; and that order of CEGAT in 
the case of one of the appellants was held to be not correct in a subsequent 
larger Bench judgment. 
Allowing the appeals, the Court 
HELD: l. The adjudication was beyond the normal period of limitation 
and the extended period of limitation was not available to the Revenue. 
[Para 14) [561-B) 
B 
2. The expression 'suppression' has been used in the provis() to Section C 
llA of Central Excise Act, 1944 accompanied by very strong words· as 'fraud' 
or 'collusion' and, therefore, has to be construed strictly. Mere omission to 
give correct information is not suppression of facts unless it was deliberate 
to stop the payment of duty. Suppression means failure to disclose full 
information with the intent to evade payment of duty. When the facts are D 
. known to bot the parties, omission by one party to do what he might have done 
would not render it suppression. When the Revenue invokes the extended 
period of limitation under Section 11-A the burden is cast upon it to prove 
suppression of fact. An incorrect statement cannot be equated with a willful 
mis-statement. The latter implies making of an incorrect statement with the 
knowledge that tlie statement was not correct. (Para 10) (560-B-D] 
E 
3. Factual position goes to show the Revenue relied on the Circular dated 
23.5.1997 and 19.12.1997. The Circular dated 6.1.1998 is the one on which 
appellant places reliance. Undisputedly, order of CEGAT in one of the 
appellants' case was held to be not correct in a subsequent larger Bench 
·judgment. It is, therefore, clear that there was scope for entertaining doubt F 
about the view to be taken. The Tribunal apparen'tly has not considered these 
aspects correctly. Contrary to the factual position, the CEGAT has held that 
no plea was taken about there being no intention to evade payment of duty as 
the same was to be reimbursed by the buyer. In fact such a plea was clearly 
taken. The factual scenario clearly goes to show that there ~as scope for G 
entertaining doubt, and taking a particular stand which rules out application 
of Section llA of the Act. (Para 11) (560-D-F) 
4. So far as fraud and collusion are concerned; it is evident that the 
intent to ev~de duty is built into these very words. So far as mis-statement or 
suppression of f

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