1. Appeal under Section 35B of the Central Excises and Salt Act, 1944 praying that in the circumstances stated therein the Tribunal will be pleased to set aside that part of order No. 72/82(C) dated 10-3-1982 of the Appellate Collector of Central Excise, Madras that allows the benefit of doubt to the respondent that there was no deliberate suppression of facts by them.
2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri A. Vijayaraghavan, Departmental Representative for the appellant and upon hearing the arguments of Shri J.B. Koshy, Advocate for the respondent, the Tribunal makes the following order: 3. Under her order C. No. V/14G/30/202/81 dated 4-1-82 the Assistant Collector of Customs and Central Excise, Ernakulam-I Division found that M/s. Fertilisers and Chemicals Tranvancore Ltd., (FACT) Udyogamandal were liable to pay duty on Sulphuric Acid used for pollution control and were not eligible for the exemption contained in Notification No. 81/75-CE dated 22-3-1975 available to Sulphuric Acid used in the manufacture of fertilisers; the company (the respondent in the present appeal) were, therefore, required to pay an amount of Rs. 37,156.99 being the duty involved for the period April 1977 to March 1981. In his Order No. V/14(G)/6/82 dated 10-3-1982 the Appellant Collector of Central Excise, Madras disagreed with the argument of the respondent that the Sulphuric Acid used for pollution control was entitled to exemption. He was, however of the opinion that, "The appellants sincerely believed that they were correct in not paying duty on the sulphuric acid used for pollution control and not recording such use in RG. 1 and RT. 12. The circumstances indicate that there was no deliberate suppression of facts by the appellants".
He extended the benefit of doubt to them and held that the demand was barred by limitation under Section 11A of the Central Excises and Salt Act, 1944.
4. The present appeal is filed by the Collector of Central Excise, Cochin against this order of the Appellate Collector.
5. It is stated in the appeal that that part of the sulphuric acid issued to the composite ammonia plant which was intended for pollution control has not been shown separately in the statutory accounts maintained by the respondent and the returns submitted by them to the Department; in the Cochin Division of the respondents duty was being collected on sulphuric acid so used; in fact by a letter No.DFM(CD)/CE/441/80 dated 24-5-1980 addressed to the Ministry of Petroleum, Chemicals and Fertilisers, Government of India, the respondent had asked that Ministry to move the Finance Ministry for exempting sulphuric acid used for effluent treatment in the fertiliser industry. Thus the respondents were aware of the correct position regarding payment of duty on the sulphuric acid! in question; they did not declare the correct position in the statutory records and returns.
Therefore, it has correctly been held by the Assistant Collector that there has been suppression of facts on the part of the assessee leading to non-levy of duty; in terms of the proviso to Section 11A of the Act, the period of limitation has, therefore, to be taken as five years from the relevant date.
6. The appellant has also sought condonation of the delay of one day in the filing of the appeal, as he had to get a copy of the letter dated 24-5-1980 from M/s. FACT addressed to Government of India which was not available with him. Considering the importance of the letter on which the appellant had to rely and the period of delay being one day, we condone the delay in the filing of the appeal.
7. The learned counsel for the respondent stated that the Cochin Division and the Udyogamandal Division of FACT are operated as independent units; it was his plea that even the Cochin Division was not paying duty on sulphuric acid used for pollution control before 1980; non-disclosure of information will not amount to suppression of facts; at best it is an mission; in the present case he pleaded that it was an unintentional one.
8. We asked the Departmental Representative to verify and let us know the factual position regarding payment of duty on sulphuric acid used for pollution control by the Cochin Division of the respondent. In his communication No. DR/ED(MAS) A. No. 9/82 : dated 26-2-1983 to the Assistant Registrar of the Tribunal, Shri A. Vijayaraghavans Junior Departmental Representative has reported that : "the Additional Collector of Central Excise, has informed that the appellants were clearing sulphuric acid for pollution control only on payment of duty from 1977 onwards in respect of their Cochin Division".
We also called for and saw representative copies of R.T.12 returns and Classification Lists filed by the Respondent during the relevant period. The R.T.12 returns refer to sulphuric acid without any distinction between its use for fertilisers and for pollution control; the R.T.12 for the month of November 1978 shows a quantity of 14851.453. M.Ts under the head "fertiliser", R.T.12 for August 1979 shows a quantity of 18,663.772 M.T. under the head "fertiliser", R.T.12 for April 1980 shows a quantity of 8437.241 M.T. as per "fertiliser consumption". The classification list approved with effect from 7-4-1977 shows sulphuric acid used for various purposes under Sl. -Nos.
1 to 4; Sl. No. 3 deals with sulphuric acid used in the manu- facture of "chemical fertilisers". There is no reference in the classification list to the sulphuric acid used for pollution control; classification list appro- ved with effect from 1-3-1979 contains the entry at Sl. No.3 as, "3. Sulphuric Acid used within the factory and that brought from outside under Chapter X procedure in the manufacture of chemical fertilisers".
In both these lists, samples drawn for test within the factory have been shown separately. From these details it is clear that the respondent took care to classify sulphuric acid used for various purposes for purposes of I assessment, both in the classification list and R.T.12 returns; they did not however refer to the acid used for pollution control separately. The R.T.12s indicate that the quantity so used has been lumped under the head "fertiliser"/"fertiliser consumption". There has, therefore, been nondisclosure of the relevant information in the statutory records required to be submitted by the respondent to the department.
"(1) When any duty of excise has not been levied or paid or has been short-levied or. short paid... a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid...
requiring him to show cause why he should not pay the amount specified in the notice".
"(2) The Assistant Collector of Central Excise shall, after considering the representation, if any, made by the person on whom - notice is served...shall determine the amount of duty of excise due from such person...." Proviso to Section 11A(1) provides that where a non-levy or short-levy is by reason of "fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty, by such person or his agent," the period of six months will be extended to five years. If, therefore, the proviso to Section 11A is to apply the notice of the demand issued by the Department and confirmed by the Assistant Collector in his order referred to, it will be within time. It was strenuously urged on behalf of the respondent that non-declaration of a fact is not suppression of facts; in any case it is not wilful suppression of facts. Reading the proviso as a whole it is clear that a suppression, if there is one, is always of some material that ought to be disclosed but is not. There is no need to qualify the word 'suppression' with the word 'wilful' occurring in the earlier part of the proviso. We would read that Section as referring to 'wilful misstatement of facts or suppression of facts". When another factory of the respondent (at Cochin) was in fact paying duty on the sulphuric acid used for pollution control and had even taken up the matter with the Government of India in the Ministry of Petroleum, Chemicals and Fertilisers to move the Ministry of Finance for exemption on the quantity so used, it cannot be said that the respondent as a jurisdic person, was unaware of the leviability of such acid to duty and the need to declare it separately to the returns and lists submitted to the Department. In the circumstances we find that there has been suppression of facts leading to non-levy of duty in the present case. In the proceedings before us there is no dispute as to the quantity of sulphuric acid used for pollution control or about its assessability to duty. In the circumstances we set aside the order of the Appellate Collector and restore order of the Assistant Collector confirming the demand of Rs. 37,156.99 being the duty involved.