THE COMMISSIONER OF CENTRAL EXCISE, AURANGABADversusM/S. BAJAJ AUTO LTD., WALUJ, AURANGABAD, THROUGH ITS VICE PRESIDENT (MATERIALS) AND ORS.

                    [2010] 14 (ADDL.) S.C.R. 184


A         THE COMMISSIONER OF CENTRAL EXCISE,
                     AURANGABAD
                                    v.
        M/S. BAJAJ AUTO LTD., WALUJ, AURANGABAD,
       THROUGH ITS VICE PRESIDENT (MATERIALS) AND
B                             ORS.
                (Civil Appeal No. 3860 of 2006)
                        NOVEMBER 12, 2010
                 [D.K. JAIN AND H.L. DATTU, JJ.]
c
           Central Excise Act, 1944: s.11A, proviso - Recovery of
     duty short paid - Invocation of the proviso - Held: Proviso to
    s. 11 A can be invoked when there is a conscious act of either
    fraud, collusion, wilful mis-statement, suppression of fact, or
D   contravention of the provisions of the Act or any of the rules
    made thereunder on the part of the assessee, with the intent
    to evade payment of duty - Since the proviso extends the
    period of limitation from six months to five years, it needs to
    be construed strictly - The initial burden is on the revenue to
E   prove that the situation visualized by the proviso exists - But
    the burden shifts on the assessee once the revenue is a(Jle
    to produce material to show that the appellant is guilty of any
    of those situations visualized in the section - In the instant
    case, the Tribunal held that the proviso was attracted since
F   the two assessee were situated under the jurisdiction of the
    same division of the revenue and, therefore, revenue was
    aware of the transactions - Tribunal erred in holding so, since
    this ground is not envisaged under the proviso to s. 11 A(1) -
    The other issues are all disputed facts which are required to
    be re-examined by the Tribunal, since under the statute it is
G   the final fact finding authority - Matter remitted to Tribunal for
    reconsideration - Interpretation of statutes - Strict
    construction - Evidence - Burden to prove suppression of
    facts.

H                                  184
 COMMNR. OF CENTRAL EXCISE v. BAJAJ AUTO                   185
        LTD., WALUJ, AURANGABAD
     The assessee-respondent no.1 was engaged in the              A
manufacture of motor vehicles. For the said purpose, it
purchased the aluminum ingots from open market and
supplied them to respondent no.4. Respondent no.4 used
the aluminum "ingots to manufacture the aluminum
castings and supplied them to the assessee. The revenue           B
issued a show cause notice on 5.3.2001 alleging that
during the period 2.6.1998 to 30.9.1999, the assessee
supplied the inputs to respondent no.4 at under-valued
landed cost as the expenses on account of sales tax,
octroi, freight, insurance, loading and unloading charges         c
were not included in the landed cost and by such
business arrangement, the assessee compensated
respondent no.4 for depressed prices of finished goods
supplied to the assessee. The assessee replied that the
demand notice was time barred and the extended period             D
of limitation as per the proviso to Section 11 A of Central
Excise Act, 1944 was not invokable since both the units
were situated under the jurisdiction of the same division
and, therefore, the jurisdictional officer of the revenue
were fully aware of the facts. The adjudicating authority
                                                                  E
held the assessee liable to pay duty and penalty. The
CESTAT reversed the order of the adjudicating authority.
The revenue filed the instant appeal.

    Allowing the appeal and remitting the matter to the
Tribunal for reconsideration, the Court                           F
      HELD: 1. The CESTAT while considering and
deciding the issue of the limitation had overlooked the
language employed in the statute. Section 11 A of the
Central Excise Act empowers the central excise officer to         G
initiate proceedings where duty has not been levied or
short levied within six months from the relevant date. But
the proviso to Section 11 A(1) provides an extended
period of limitation if there is fraud, collusion or any wilful
mis-statement or suppression of facts, or contravention
                                                                  H
    186    SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A of any of the provisions of the Act or of the rules made
  thereunder with an intent to evade payment of duty. The
  extended period so provided is of five years instead of
  six months. Since the proviso extends the period of
  limitation from six months to five years, it needs to be
B construed strictly. The initial burden is on the revenue to
  prove that the situation visualized by the proviso existed.
  But the burden shifts on the assessee once the revenue
  is able to produce material to show that the assessee is
  guilty of any of those situations visualized in the Section.
c In the instant case, the Tribunal while considering this
  issue did not state whether or not there were any such
  circumstances which would not allow the revenue to
  invoke extended period of limitation. It only observed in
  its order since both the assessees were situated under
D the jurisdiction of the same division, as such it cannot be
  reasonable to conclude that the revenue was not aware
  of the transactions. Since this is not what is envisaged
  under the proviso to Section 11 A(1) of the Act, the
  reasoning and the conclusion reached by the Tribunal
  cannot be accepted. As regards the other issues, they are
E all disputed facts which are required to be re-examined
  by the Tribunal, since under the Statute, it is the final fact
  finding authority. [Paras 10, 12, 16, 18] [193-F; 195-C-F;
  197-0-F-H; 198-A]

F       Collector of Central Excise, Hyderabad v. Chemphar
    Drugs and Liniments, Hyderabad (1989) 2 SCC 127; Cosmic
    Dye Chemical v. Collector of Central Excise, Bombay (1995)
    6 SCC 117; Anand Nishikawa Co. Ltd. v. Commissioner of
    Central Excise, Meerut (2005) 7 SCC 749, relied on.
G                       Case Law Reference:
          (1989) 2 sec 121       relied on            Para 13
          (1995) s sec 111       relied on            Para 14

H         (2005) 1 sec 749       relied on            Para 15
 COMMNR. OF CENTRAL EXCISE v. BAJAJ AUTO                     187
        LTD., WALUJ, AURANGABAD
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.                  A
3860 of 2006.

     From the Judgment & Order dated 13.1.2006 of the
Customs, Excise & Service Tax Appellate Tribunal, West Zonal
Bench at Mumbai, in Appeal No. E/1817, 1879, 2142 & 2143             B
of 2002.

    Joseph Vellapally, Pratap Venugopal, Surekha Raman,
Puroshottam Kumar Jha, Namrata (for K.J. John & Co.) for the
Appellant.
                                                                     c
   V. Shekhar, B. Sunita Rao, Amey Nargolkar, Zangpo
Sherpa, B. Krishna Prasad, B.V. Balaram Das for the
Respondents.

     The Judgment of the Court was delivered by
                                                                     D
     H.L. DATTU, J. 1. The appellant, being aggrieved by the
order passed by the Customs, Excise and Service Tax
Appellate Tribunal, West Zonal Bench at Mumbai, (for short
'Tribunal') in Appeal No.A/75-78/WZB/06/C-11/EB dated
13.01.2006, is before us in this appeal filed under Section 130-     E
E of the Customs Act, 1962 (hereinafter referred to as 'the Act').

     2. The issue in this appeal relates to the valuati911 of
aluminum castings manufactured by M/s. Anurang Engineering
Co. Ltd. (for short 'Anurang') which in turn is based on the
                                                                     F
purchase price of aluminum ingots supplied by M/s. Bajaj Auto
Ltd., Waluk, Aurangabad (for short 'Bajaj'). Anurang, who is
Respondent no. 4 in this appeal, is engaged in the manufacture
of aluminium castings, commonly known as "handle bar body",
"crank case clutch", and castings used as motor vehicle parts,       G
classifiable under Chapter Sub-heading 8708.00 and 8714.00
of the Central Excise Tariff Act, 1985. Bajaj, the Respondent
no.1, was supplying inputs - aluminum ingots after purchasing
the same from other manufacturers to Anurang for the relevant
period under the cover of invoices issued under Rule 57F(2)
                                                                     H
    188    SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A   and Rule 57(3) of the Central Excise Rules, 1994, after
    reversing the MODVAT credit availed on the said input.

          3. A show cause notice dated 05.03.2001 was issued by
    the Commissioner of Customs and Central Excise,
B   Aurangabad, in which it was alleged that Anurang was receiving
     inputs from Bajaj at an under-valued landed cost by not including
    expenses on account of sales tax, octroi, freight, insurance,
    loading-unloading charges and handling charges, and that Bajaj
    was charging only the basic price of such inputs equal to the
C   basic price charged by the original manufacturers of the said
    inputs to Bajaj, and since the additional cost of loading-
    unloading, freight etc. was not included in the input supplied to
    Anurang, there was consequent reduction in the landed cost of
    such inputs. It was also alleged that the price charged by Bajaj
    was depressed price although the same was coloured as
D   negotiated price and the price indicated in the purchase orders
    was influenced by the supply of inputs by Bajaj at a lower landed
    cost and by this business arrangement, Bajaj had compensated
    Anurang for depressed prices of Anurang's finished goods
    supplied to Bajaj. Thus, both of them were aiding each other
E   for mutual business interest so that the production cost of each
    other was kept at minimum and the Central Excise Duty was
    discharged at lower value. The view of the adjudicating authority
    was thqt the price charged in the Central Excise invoices by
    Anurang for their finished goods was not the sole consideration
F   for sale, since the proportionate landed cost charges were not
    included by Bajaj which is additional consideration under Rule
    5 of the Central Excise (Valuation) Rules, 1975. Hence,
    expenses incurred by Bajaj, in addition to the price, were
    required to be loaded in the assessable value for payment of
G   Central Excise Duty. It was in these circumstances that they
    were asked to show cause why differential duty amounting to
    '27, 71,594/- due to undervalued clearances of the finished
    goods effected during the period with effect from 02.06.1998
    to 30.09.1999 should not              be recovered under Proviso to
                               ., ... ""'\::.

H
  COMMNR. OF CENTRAL EXCISE v. BAJAJ AUTO                     189
   LTD., WALUJ, AURANGABAD [H.L. DATTU, J.]
Section 11AC(1) of the Act read with Rule 5 of the Central           A
Excise (Valuation) Rules, 1975, why penalty under Section
11 AC and interest under Section 11 AB of the Act should not
be levied and recovered and penalty under Rule 209A of the
Central Excise Rules, 1944, should not be imposed and
recovered from Respondent Nos. 1 to 3 viz. Bajaj, Sh.Ranjit          B
Gupta, Vice President (Materials} of Bajaj and Sh. Anurag
Naresh Chandra, Director of Anurang.

      4. In reply to the notice, Bajaj had stated that the sale of
inputs - aluminum ingots to Anurang was on the basis of fair         C
market price mutually agreed between the parties. It also
claimed that there was no provision in Central Excise Laws
which imposed an obligation on a person to sell his goods at
a particular price in such transactions. They also claimed that
the notice and the demand therein was time-barred as it had
been issued beyond the time prescribed under Section 11A             D
of the Act (since the notice was for the period June 1998 to
September 1999, and the notice date was 05.03.2001 and was
served by post on 22.03.2001 ), and that jurisdictional officers
of the specific division of the Department were well aware of
these facts, since both the units are situated under the             E
jurisdiction of the same division. It was also contended that
there was no deliberate suppression of facts, or mis-statements
or intention to evade Central Excise Duty on their part. Anurang,
in their reply, had stated that the price charged by Bajaj to them
was for sale of ingots and similarly, final product sold by          F
Anurang to Bajaj was contracted/negotiated prices and,
therefore, they have not 96ntravened any provisions of the Act
and the Rules framed thereunder.

 , 5. After adjudication, the adjudicating authority held that the   G
prices charged by Anurang were depressed prices coloured
as negotiated prices. Further, Bajaj was supplying drawings/
designs/specifications free of cost to Anurang to get the goods
manufactured according to their specifications from them,
which the Department claimed was for aiding each other for
                                                                     H
    190     SUPREME COURT REPORTS [2010) 14 (ADDL.) S.C.R.


A mutual business interest so that the production cost of each
  other is kept at a minimum and the Central Excise Duty is
  discharged at a lower rate. The adjudicating authority has further
  observed that by providing inputs at lower landed cost and
  drawings and designs free of cost, Bajaj was incurring part of
B the production cost of the finished goods manufactured and
  supplied exclusively to it. Thus, the adjudicating authority has
  concluded that Anurang contravened Rule 5 of Central Excise
  (Valuation) Rules, 1975 read with Section 4 of the CE Act, and
  Rule 9 read with Rules 52A, 54, 173F and 173G of the CE
c Rules. Accordingly, the adjudicating authority vide Order-in-
  Original No. 12/CEX/2002 dated 31.03.2002, levied duty of
  '27,71,594/- under Section 11A(1), penalty of '27,71,594/-
  under Section 11AC, and interest under Section 11AB against
  the assessee - Anurang. The adjudicating authority also
0 imposed penalty on Bajaj of '2.7 lakhs, and personal penalties
  of '50,000 on Mr. Anurag Nareshchandra, Director, Anurang;
  and Mr. Ranjit Gupta, Vice-President, Bajaj, under Rule 209A
  of the Central Excise Rules, 1944.

       6. Aggrieved by the said order, the parties before the
E adjudicating authority filed Appeal Nos.E/1817, 1879, 2142 and
  2143/02 before the Tribunal. The Tribunal by its common Order
  No. A/75-78/WZB/06/C-ll/EB dated 13.01.2006 has allowed the
  appeals and has set aside the order passed by the
  adjudicating authority. The Tribunal inter-alia adopted the
F following reasoning while allowing the appeal:

          "However, while adjudicating the matter the Commissioner,
          in para 16 of the order has observed that:

          "In this case there is no allegation that while paying duty
G         on ingots under Rule 57F(3) M/s. Bajaj Auto Ltd. have
          undervalued the ingots. The payment of duty under this rule
          is not the subject matter, therefore, on this account the
          pleadings of the assessee and other notices are not
          relevant. This matter is regarding under valuation of final
H         product".
 COMMNR. OF CENTRAL EXCISE v. BAJAJ AUTO                    191
  LTD., WALUJ, AURANGABAD [H.L. DAJTU, J.]
    The above observations made by the Commissioner are             A
    in contrast to the findings arrived at by him. If the ingots
    have been sold at the correct value, how the value of the
    same can be enhanced at the manufacturers end by some
    hypothetical additions on various grounds. It is also on
    reco~ that the statement of the Authorized Representative       B
    of Mis. Bajaj Auto Ltd. as also of MIS. Anurang Egg. Co.
    Ltd. are to the effect that the prices of ingots were
    negotiated prices. However the adjudicating authority has
    observed that though the prices were agreed but they were
    not genuine and were adopted for under valuation of the         c
    final product. This is nothing but self contradiction. In any
    case, we find that whatever duty was being paid by M/s.
    Anurang Engg. Co. Ltd. was being taken as credit by M/
    s. Bajaj Auto Ltd. thus leading to revenue neutral situation
    in which case the appellants cannot be attributed with any      0
     intention to evade payment of duty. The burden to prove
     under valuation is on the revenue and is required to be
    discharged by production of sufficient evidence. Ordinarily,
    the court, should proceed on the basis that the apparent
    tenor of the agreements reflected the real state of affairs     E
     and what is required to be examined is as to whether the
     revenue has succeeded in showing that the apparent is not
     real and the price shown in the invoice does not reflect the
     true price. Nothing has been shown in the present case.
     The entire case is based on assumptions and
     presumptions as such we are of the view that the               F
     confirmation of duty against M/s. Anurang Engg. Co. Ltd.
     is not sustainable."

     7. Mr. V. Shekhar, learned senior counsel for the Revenue
submitted that Sajaj has under-valued inputs which were being       G
sold to Anurang by incurring all the landed costs such as freight
charges, loading, unloading and handling charges etc: Anurang
in turn has sold the manufactured goods in its factory only to
Bajaj after paying the Excise Duty under the Act. Therefore, the
learned senior counsel would submit that since the inputs were      H
    192   SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A   received at a lesser price, the manufacturing cost would also
    be less and thereby Anurang has paid the lesser Excise Duty.
    It is also contended that it is for this reason the adjudicating
    authority has come to the conclusion that the declarations filed
    by Anurang under the Rules is misstatement of facts.
B   Alternatively, it is contended that Bajaj while supplying the
    inputs to Anurang has undervalued the goods without including
    certain expenses incurred by it, which has resulted in short
    payment of Excise Duty by Anurang on its supply of
    manufactured goods to Bajaj. The learned counsel, in aid of his
c   submission, has relied on the principles settled by this Court
    regarding the importance of landed cost of raw materials in
    determining assessable value of the manufactured goods, and
    according to him the same must be included in the value of the
    final product. He further submits that the concept of 'revenue
D   neutrality' is not applicable in the present case, and that there
    were no contrary findings of the Commissioner in this regard.
    He also submits that the finding of the Tribunal that the findings
    and conclusions reached by the adjudicating authority is on
    mere assumptions and presumptions is erroneous. According
E   to the learned counsel, the findings of the adjudicating authority
    was after thorough enquiry and investigation of the records of
    the assessee and also based on the statements of the Vice
    President of Bajaj and Director of Anurang during investigation.
    The learned counsel further points out that the extended period
    of limitation as provided under Section 11 A(1) of the Act would
F   come to the aid of the Department since the respondents did
    not disclose the correct facts before the Department with
    intention to evade payment of duty under the Act.

       8. Per contra, Mr. Joseph Vellapally, learned senior
G counsel for the respondents would contend that the assumption
  of adjudicating authority that Anurang in their invoices has not
  given true and correct declaration, is not only contradictory but
  also not based on any evidence whatsoever. It is further
  contended that on mere presumption and assumption, the
H adjudicating authority cannot create demands under the Act
 COMMNR. OF CENTRAL EXCISE v. BAJAJ AUTO                      193
  LTD., WALUJ, AURANGABAD [H.L. DATTU, J.]
and then proceed to recover them by adopting coercive                A
measures. It is also contended that Bajaj and Anurang are
under the jurisdiction of the same division and as such, it cannot
be reasonable to conclude that the revenue was not aware of
the transactions of both the units and therefore, the revenue
cannot invoke the extended period of limitation to demand of         B
duty under the Act.

     9. The Tribunal, while considering the issue of limitation in
the impugned order has concluded as under:-

    "Apart from the merit of the case we also note that the          C
    demand is hopelessly barred by limitation. Notice for the
    period June 1998 to September, 1999was issued on
    05.03.2001. The ingots were being cleared by Mis Bajaj
    Auto Ltd. on their invoices and the final casting products
    were being cleared by M/s Anurag Engg. Co. Ltd. on               D
    proper invoices. Both the units are situated under the
    jurisdiction of same division and as such it cannot be
    reasonable concluded that revenue was not aware of the
    said transactions and the value of the same. As such we
    are of the view that the demand is also barred by                E
    limitation."

     10. In our view, the aforesaid issue was one of the
important issues that fell for the consideration before the
Tribunal. The Tribunal, in our view, while considering and
                                                                     F
deciding the same, has overlooked the language employed in
the Statute. Therefore, we deem it proper to remand the entire
matter to the Tribunal for reconsideration and decision not only
on this issue, but also the other issues which were canvassed
before us by learned senior counsel for the parties. Therefore,
we now take up that issue for our consideration and decision.        G

    11. As we have already observed, the Tribunal, while
considering this issue, has neither looked into the ingredients
of Section 11A of the Act nor the construction placed by this
Court on this Section. Section 11A of the Act reads :-               H
    194     SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.
                                                                  ,.
                                                                '
A         Section 11 A. - Recovery of duties not levied or not paid
          or short-levied or short-paid or erroneously refunded. -

          (1) When any duty of excise has not been levied or paid
          or has .been short-levied or short-paid or erroneously
          refunded, whether or not such non-levy or non-payment,
B
          short-levy or short payment or erroneous refund, as the
          case may be, was on the basis of any approval,
          acceptance or assessment relating to the rate of duty on
          or valuation of excisable goods under any other provisions
          of this Act or the rules made thereunder, a Central Excise
c         Officer may, within one year from the relevant date, serve
          notice on the person chargeable with the duty which has
          not been levied or paid or which has been short-levied or
          short-paid or to whom the refund has erroneously been
          made, requiring him to show cause why he should not pay
D         the amount specified in the notice:

          Provided that where any duty of excise has not been levied
          or paid or has been short-levied or short-paid or
          erroneously refunded by reason of fraud, collusion or any
E         wilful mis-statement 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 provisions of this sub-
          section shall have effect, as if for the words one year, the
F         words "five years" were substituted:

          Explanation. - Where the service of the notice is stayed
          by an order of a court, the period of such stay shall be
          excluded in computing the aforesaid period of [one year]
          or five years, as the case may be.
G
          (1A) When any duty of excise has not been levied or paid
          or has been short-levied or short paid or erroneously
          refunded, by reason of fraud, collusion or any wilful mis-
          statement or suppression of facts, or contravention of any
H         of the provisions of this Act or the rules made thereunder
  COMMNR. OF CENTRAL EXCISE v. BAJAJ AUTO                      195
   LTD., WALUJ, AURANGABAD [H.L. DATTU, J.]
     with intent to evade payment of duty, by such person or his      A
     agent, to whom a notice is served under the proviso to sub-
     section (1) by the Central Excise Officer, may pay duty in
     full or in part as may be accepted by him, and the interest
     payable thereon under section 11AB and penalty equal to
     twenty-five per cent of the duty specified in the notice or      B
     the duty so accepted by such person within thirty days of
     the receipt of the notice.

      12. Section 11A of the Act empowers the central excise
officer to initiate proceedings where duty has not been levied        C
or short levied within six months from the relevant date. But the
proviso to Section 11A(1 ), provides an extended period of
limitation provided the duty is not levied or paid or which has
been short-levied or short-paid or erroneously refunded, if there
is fraud, collusion or any wilful mis-statement or suppression
of facts, or contravention of any of the provisions of this Act or    D
of the rules made thereunder with intent to evade payment of
duty. The extended period so provided is of five years instead
of six months. Since the proviso extends the period of limitation
from six months to five years, it needs to be construed strictly.
The initial burden is on the department to prove that the situation   E
visualized by the proviso existed. But the burden shifts on the
assessee once the department is able to produce material to
show that the appellant is guilty of any of those situations
visualized in the Section.
                                                                      F
      13. Interpreting this provision, this Court in Collector of
 Central Excise, Hyderabad v. Chemphar Drugs and
.Liniments, Hyderabad, (1989) 2 SCC 127, held: (when the
1period prescribed was six months prior to it being made one
•year by the Finance Act, 2000, with effect from 12.05.2000):
                                                                      G
     "In order to make the demand for duty sustainable beyond
     a period of six months and up to a period of 5 years in
     view of the proviso to sub-section (1) of Section 11 A of
     the Act, it has to be established that the duty of excise has
     not been levied or paid or short-levied or short-paid, or        H
    196 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A       erroneously refunded by reasons of either fraud or collusion
        or wilful mis-statement or suppression of facts or
        contravention of any provision of the Act or Rules made
        thereunder, with intent to evade payment of duty.
        Something positive other than mere inaction or failure on
B       the parl of the manufacturer or producer or conscious or
        deliberate withholding of information when the
        manufacturer knew otherwise, is required before it is
        saddled with any liability, before the period of six months.
        Whether in a particular set of facts and circumstances
c       there was any fraud or collusion or wilful mis-statement or
        suppression or contravention of any provision of any Act,
        is a question of fact depending upon the facts and
        circumstances of a particular case."

      14. In the case of Cosmic Dye Chemical v. Collector of
D Central Excise, Bombay, (1995) 6 SCC 117, it is held:

        "Now so far as fraud and collusion are concerned, it is
        evident that the requisite intent, i.e., intent to evade duty
        is built into these very words. So far as mis-statement or
E       suppression of facts are concerned, they are clearly
        qualified by the word "wilful" preceding the words "mis-
        statement or suppression of facts" which means with intent
        to evade duty. The next set of words "contravention of any
        of the provisions of this Act or rules" is again qualified by
F       the immediately following words "with intent to evade
        payment of duty". It is, therefore, not correct to say that
        there can be a suppression or mis-statement of fact,
        which is not wilful and yet constitute a permissible ground
        for the purpose of the proviso to Section 11-A. Mis-
        statement or suppression of fact must be willful."
G
        15. In Anand Nishikawa Co. Ltd. v. Commissioner of
    Central Excise, Meerut, (2005) 7 SCC 749, this Court has
    observed:

H       " ... we find that "suppression of facts" can have only one
  COMMNR. OF CENTRAL EXCISE v. BAJAJ AUTO                     197
   LTD., WALUJ, AURANGABAD [H.L. DATTU, J.]
     meaning that the correct information was not disclosed A
     deliberately to evade payment of duty, when facts were
     known to both the parties, the omission by one to do what·
     he might have done not that he must have done would not
     render it suppression. It is settled law that mere failure to
     declare does not amount to wilful suppression. There B
     must be some positive act from the side of the assessee
     to find wilful suppression."

     16. In our view, on a reading of the relevant provision the
extended period of limitation as provided by the proviso to           C
Section 11A(1) of the Act, can only be invoked when there is a
conscious act of either fraud, collusion, wilful mis-statement,
suppression of fact, or contravention of the provisions of the Act
or any of the rules made thereunder on the part of the person
chargeable with duty or his agent, with the intent to evade
payment of duty. In the present case, the Tribunal while              D
considering this issue has not stated whether or not there were
any such circumstances which would not allow the revenue to
invoke extended period of limitation. It only observes in its order
since both the assessees are situated under the jurisdiction of
the same division and as such it· cannot be reasonable to             E
conclude that the revenue was not aware of the transactions.
Since this is not what is envisaged under the proviso to Section
11 A(1) of the Act, we cannot agree with the reasoning and the
conclusion reached by the Tribunal.
                                                                      F
     17. In view of the above, we set aside the order passed
by the Tribunal, and remand the matter to the Tribunal to
determine whether on the facts of the case, any of the grounds
enumerated in the proviso to sub-section (1) of Section 11A
of the Act are made out by the Revenue and thereby the                G
Revenue is justified in invoking the extended period of limitation
to make demand of duty under the Act.

    18. In so far as other issue that was canvassed by learned
counsel for the Revenue, in our view, those are all disputed
                                                                      H
   198      SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.


A facts which require to be re-examined by the Tribunal, since the
  Tribunal under the Statute is the final fact finding authority.

        19. In view of the above discussion, we allow this appeal
  and set aside the impugned order passed by the Tribunal and
8 remand the matter for fresh consideration of all the issues
  raised by both the parties. Liberty is reserved to both the parties
  to place on record such other material, which is available in their
  possession in support of their case. We clarify that we h ave
  not expressed any opinion on the merits of the claim of either
C of the parties in this appeal. In the facts and circumstances of
  the case, parties are directed to bear their own costs.

   B.B.B.                                          Appeal allowed.