LexM/S. UNIWORTH TEXTILES LTD. versus COMMISSIONER OF CENTRAL EXCISE, RAIPUR
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2013] 3 S.C.R. 27
M/S. UNIWORTH TEXTILES LTD.
v.
COMMISSIONER OF CENTRAL EXCISE, RAIPUR
·
(Civil Appeal No.6060 of 2003)
JANUARY 22, 2013
[D.K. JAIN AND MADAN B. LOKUR, JJ.]
Customs Act, 1962 - s.28 r!w the proviso thereto and
A
B
s. 112 -
Levy of customs duty and penalty - Challenge to -
Plea of assessee-appellant that the demand of duty along C
with the penalty was barred by limitation turned down by
Tribunal - Held: Conclusion of the Tribunal that mere non-
payment of duties is equivalent to collusion or willful
·misstatement or suppression of facts is untenable - S.28
contemplates two situations, viz. inadvertent non-payment and D
deliberate default - The former is canvassed in the main body
of s.28 and is met with a limitation period of six months,
whereas the latter, finds abode in the proviso to the section
and faces a limitation period of five years - For the operation
of the proviso, tf]e intention to deliberately default is a E
mandatory prerequisite - In the present case, from the
evidence adduced by the appellant, an inference of bona fide
conduct is drawn in favour of the appellant - Evidently the
appellant made efforts in pursuit of adherence to the Jaw rather
than its breach -
Moreover, the proviso to s.28 finds F
application only when specific and explicit averments
challenging the fides of the conduct of the assessee are made
in the show cause notice, a requirement that the show cause
· notice in the present case fails to meet - On account of the
fact that the burden of proof of proving ma/a fide conduct under G
the proviso to s.28 lies with the Revenue; that in furtherance
of the same, no specific averments find a mention in the show
cause ·notice which is a mandatory requirement for
commencement of action under the said proviso; and that
27
H
28
SUPREME COURT REPORTS
[2013) 3 S.C.R.
A nothing on record displays a willful default on the part of the
appellant, the extended period of limitation under the said
provision could not be invoked against the appellant.
Burden of proof - Lies on whom - Held: The burden of
8 proving any form of ma/a fide lies on the shoulders of the one
alleging it.
The appellant, an Export Oriented Unit ("EOU"), is
engaged in the manufacture of all wool and poly-wool
worsted grey fabrics. The sister unit of appellant,
C Uniworth Ltd., another EOU, engaged in the generation
of power from a captive power plant, obtained permission
for usage of electricity generated by the captive power
plant by both, Uniworth Ltd. and the appellant. The
appellant purchased electricity from Uniworth Ltd. under
D an agreement which continued till 1999. Prior to January-
February, 2000, the sister unit i.e. Uniworth Ltd. procured
furnace oil required for running the captive power plant.
This purchase of furnace oil was exempted from payment
of customs duty under Notification No. 53/97-Cus. In
E January-February, 2000, Uniworth Ltd. exhausted the
limit of letter of credit opened by it for the duty-free import
of furnace oil. Thereafter, Uniworth Ltd. informed the
appellant that it would require the arrangement for
running the captive power plant for its own -use, and
F hence, would be compelled to stop the supply of
electricity to the appellant. Consequently, as a temporary
measure, for overcoming this difficulty, the appellant,
while availing the benefit of Notification
No. 53/97-Cus,
procured furnace oil from Coastal Wartsila Petroleum
G Ltd., a Foreign Trade Zone unit. It supplied the same to
Uniworth Ltd. for generation of electricity, which it
continued to receive as before.
Subsequently, the appellant received a show cause
notice from the Commissioner of Customs, demanding
H duty for the period during which the appellant imported
UNIWORTH TEXTILES LTD. v. COMMISSIONER OF
29
CENTRAL EXCISE, RAIPUR
furnace oil on behalf of Uniworth Ltd. The show cause A
notice was issued on 02.08.2001, more than six months
after the appellant had imported furnace oil on behalf of
Uniworth Ltd. in January, 2001.
By the impugned order, the Tribunal upheld the levy 8
of customs duty on the import of furnace oil as also the
penalty under Section 112 of the Customs Act, 1962,
rejecting the plea of the appellant that demand of the duty
along with the penalty was barred by limitation.
Allowing the appeal, the Court
c
HELD: 1.1. Section 28 of the Customs Act, 1962
imposes a limitation period of six months within which the
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