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2008 (230) E.L.T. 442 (Tri. - Del.)
IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI
[COURT NO. III]
S/Shri M. Veeraiyan, Member (T) and P.K. Das, Member (J)
KNIT FOULDS P. LTD.
Versus
COMMISSIONER OF CENTRAL EXCISE, JALANDHAR
Final Order No. 423/2008-EX(PB), dated 20-6-2008 in Appeal No. E/4290/2004
Demand - Limitation - Extended period, non invocation of -
Clearances at two factories required to be disclosed to claim exemption
under notification No. 8/99-C.E. - Assessee bona fidely disclosing only
clearance from other unit under one notification and not clearances
made under 5/99-C.E. - In absence of evidence about intention to evade
duty, same attributed to lack of understanding about notification - Case
of difference in interpretation - Extended period held not invocable,
penalty also set aside - Section 11A and 11AC of Central Excise Act,
1944. [para 6]
Appeal disposed off
REPRESENTED BY :Shri Sandeep Malhotra, Advocate, for the Appellant.
Shri Sanjay Kumar, DR, for the Respondent.
[Order per : M. Veeraiyan, Member (T) (for the Bench)]. - This is an appeal against
the order of the Commissioner (Appeals) No. 257/CE/JAL/2004 dated 29-5-2004.
2. Heard both sides.
3. The relevant facts, in brief, are as follows :-
(a) The appellant has two units, one at Kapurthala and the other at Hoshiarpur.
(b) The Kapurthala unit was manufacturing some products for which they have
claimed value based exemption under Notification No. 5/99 and for other
products, they availed the value based exemption under Notification No. 8/99.
The unit at Hoshiarpur (the present appellant) manufactured products covered
under Notification No. 8/99.
(c) The appellant filed classification list in respect of their unit at Hoshiarpur wherein
they have indicated the existence of their other unit at Kapurthala and also
indicated the details of clearance of products covered under Notification No. 8/99
in respect of Kapurthala unit. However, they have not furnished the details and
value of clearance of the products covered under Notification No. 5/99.
(d) The original authority held that for the purpose of determining the eligibility to the
exemption under Notification No. 5/99 in respect of Hoshiarpur unit, entire value
of clearance of products of Kapurthala unit including those covered under
Notification No. 5/99 should have been disclosed and taken into account and
accordingly confirmed the demand of Rs. 79,911/- and imposed equal amount of
penalty. The Commissioner (Appeals) concurred with the above decision.
4. The learned advocate pleads that they had no intention to suppress the relevant
details. They had disclosed the existence of the second unit. It was their stand that the value
of clearances covered by another notification need not be included for the purpose of unit
No. 2.

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5. The learned DR submits that the clearance figures of both the products in respect
of Kapurthala should have been disclosed and the failure to furnish is wilful and with
intention to evade the excise duty. Therefore, he pleads for upholding the order of the
Commissioner (Appeals).
6. We have carefully considered the submissions from both the sides. Learned
advocate concedes that value of clearance of both the products relating to Kapurthala unit
are relevant for the purpose of determining the exemption to the Hosiarpur unit. However
non-furnishing of these details was not intentional. On perusal of the record, we find that
there is no evidence to suggest intention to evade on the part of the appellant. We are
inclined to accept that it was due to lack of understanding of the provisions of Notification. As
it appears to be case of difference in interpretation, we hold that invocation of extended
period for demanding duty is not justified. Imposition of penalty is also not warranted.
7. In the light of the above, we uphold the demand of duty involved within the normal
period of limitation and we set aside the demand of the balance of duty involved. Penalty is
set aside.
8. The appeal is disposed off with consequential relief as indicated above.
(Dictated in the open Court)
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