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Customs Act, 1962 - s.28 r/w the proviso thereto and s. 112 - Levy of customs duty and penalty - Challenge to - Plea of assessee-appellant that the demand of duty along 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 wilful ·misstatement or suppression of facts is untenable - S.28 contemplates two situations, viz. inadvertent non-payment and 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, the intention to deliberately default is a 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 law rather than its breach - Moreover, the proviso to s.28 finds 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 mala fide conduct under 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 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 proving any form of mala 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, 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 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 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 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 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 duty for the period during which the appellant imported furnace oil on behalf of Uniworth Ltd. The show cause 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 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. |
