Mere inaction or mere non-disclosure is not Suppression of Facts :
Suppression means not providing information which the person is legally required to state, but is intentionally or deliberately not stated.
Hon. Supreme Court, in Collector v. Chemphar Drugs 40 ELT 276 = 1989 (2) SCC 127 = AIR 1989 SC 832, has held that mere inaction or failure on part of manufacturer will not amount to suppression of facts. Conscious or deliberate withholding of information when the manufacturer knew otherwise, is required to be established, before saddling the manufacturer with liability for extended period [reiterated in Lubri-Chem Industries Ltd. v. Collector – 1994 (73) ELT 257 (SC) = 1994(2) Supp SCC III 258 = 1994 AIR SCW 3672 = AIR 1994 SC 2604 = 1994(4) RLT 239 (SC)] – same view in M K Kotecha v. CCE AIR 2005 SC 1147 = 179 ELT 261 (SC 3 member bench) * Nestle India v. CCE (2009) 235 ELT 577 (SC).
In the case of Padmini Products v. CCE – 1989 (43) ELT 195 (SC) = (1989) 4 SCC 275 = AIR 1989 SC 2278 = 25 ECR 289 = (1990) 76 STC 411 (SC), it has been held by Apex Court that mere non-declaration is not sufficient to invoke larger period but some more positive act is required. It was held that mere failure or negligence on part of manufacturer to take licence or pay duty in case where there was scope for doubt as to whether goods were dutiable or not, could not attract the extended limitation. In this case, the assessee did not obtain excise licence under belief that the goods are exempt from duty. There was scope of doubt regarding liability of duty. Hence, demand for period beyond period of one year (that time six months) was set aside – followed in Jaiprakash Industries v. CCE 2002 AIR SCW 4840 = (2003) 1 SCC 67 = 146 ELT 481 (SC 3 member bench) * Cadila Laboratories v. CCE 2003 AIR SCW 1115 = 152 ELT 262 (SC) * Gopal Zarda Udyog v. CCE 2005 (188) ELT 251 (SC 3 member bench) * Uniworth Textiles v. CCE (2013) 9 SCC 753 = 39 STT 58 = 31 67 = 288 ELT 161 (SC) * Escorts Ltd. v. CCE (2015) 9 SCC109 = 319 ELT 406 (SC).
Mere omission to give correct information did not constitute suppression unless that omission was made wilfully in order to evade duty. Suppression would mean failure to disclose full and true information with the intent to evade payment of duty – CCE v. Ballarpur Industries Ltd. (2007) 11 STT 6 (SC) – same view in Continental Foundation Jt Venture v. CCE (2007) 10 SCC 337 = 216 ELT 177 (SC) * Anand Nishikawa Co. Ltd. v. CCE 2005 (188) ELT 149 = 2 STT 226 = (2005) 7 SCC 749 (SC) – quoted with approval in CCE v. Damnet Chemicals (2007) 216 ELT 3 (SC) * UOI v. Rajasthan Spinning & Weaving
Mills (2009) 20 STT 481 = 180 Taxman 609 = 238 ELT 3 (SC)* Escorts Ltd. v. CCE (2015) 9 SCC 109 = 319 ELT 406 (SC).
A mere omission or negligence would not constitute a deliberate act of ‘suppressio veri’ or ‘suggestio falsi’ – Dilip N Shroff v. Jt CIT (2007) 161 Taxman 218 = 291 ITR 519 (SC) – quoted in CWT v. Smt. Shakuntala Devi Dalmia (2008) 172 Taxman 162 (All HC DB) * CIT v. Cafco Syndicate Shipping Co. (2008) 174 Taxman 406 (Mad HC DB).