"16or wilfulmis-statement or suppression of fact on the part of theassessee or by reason of contravention of any of the provisions of theAct or of the Rules made thereunder with intent to evade payment ofduties by such person or his agent. There is no such averment to befound in the show cause notice. There is no averment that the duty ofexcise had been intentionally evaded or that fraud or collusion hadbeen noticed or that the assessee was guilty of wilfulmis-statement orsuppression of fact. In the absence of such averments in the show causenotice it is difficult to understand how the Revenue could sustain thenotice under the proviso to Section 11A(1) of the Act.”? The Hon’ble Madhya Pradesh High Court in Panama Chemical Works v. Union ofIndia 1992 (62) ELT 241 has held that extended period cannot be invoked unlessand until there is material suppression on the part of the assessee”“About invoking of the provisions of Section 11A also, it is the settledprinciple that the provisions of Section 11A are available to theauthorities provided the assessee has been guilty of misrepresentation,fraud or suppression of fact etc. In view of the aforesaid discussion wedo not find it either a case of fraud, misrepresentation or suppressionof fact”? The Hon’ble CESTAT in the case of Trinity Auto Components Ltd. v. CCE, Pune- III 2010 (257) ELT 548 has held as under:“6. On careful examination of the records and considering thearguments advanced by both the parties, I find that in this case theshow-cause notice was issued to the appellant for contravention of 17Rule 3(4) of the Cenvat Credit Rules, 2002 wherein the question arisethat the scope of expression capital goods cleared as such it is allegedthat when the capital goods cleared as such and would be required toreverse as per Rule 3(4) of Cenvat Credit Rules. It is not in dispute thatthe demand confirmed against the appellant for contravention of Rule3(4) of the Cenvat Credit Rules, 2002. The adjudicating authority reliedon the decision of Madura Coats Pvt. Ltd. v. CCE - 2005 (190) E.L.T. 450(Tri. - Bang.) wherein the Tribunal held that duty on used cenvatedcapital goods is not required to be paid when they are sold. What isimportant to note that used capital goods referred to capital goodswhich have become scraps and which cannot be used for the purposefor which they are meant to be used. If they are still in a usablecondition, they will not fall in the category of used goods. It wasobserved by the adjudicating authority that the appellant hasintentionally paid less amount of duty while clearance of the goodshence the extended period of limitation was rightly invoked. TheCommissioner (Appeals) has relied on the decision of the Madura CoatsPvt. Ltd (supra) and confirmed the demand with regard to thelimitation. He also found that there was suppression of facts as nointimation of clearance was given until detected by the Department. Inthis case, I find that the appellant has filed their ER1 return regularlyand in the returns for the year 2003 it is clearly mentioned thatremoval of capital goods worth Rs. 3 lakhs and duty was paid thereon.….” 182.7 In light of the foregoing, it is submitted that the extended period of limitation is notapplicable in the present case of the Noticee. Therefore, SCN for the extended periodshould be dropped on this ground itself.3 Justification for non-levy of penalty under Section 76, Section 77 and Section 78of the Act 3.3 It is seen that the SCN has proposed to charge penalties under Section 76, 77 & 78 ofthe Act. It is submitted that the SCN has not given any substantial reason to show thatthe Noticee undertook any mala-fide activity. It is settled law that the onus ofestablishing such mala-fide fraud etc. vests with the department. In the absence of thesame, invocation of penalties against the Noticee is clearly devoid of merits. Relianceis placed on following judgments:? In Hindustan Steel Limited v. State of Orissa, 1978 (2) ELT J 159, the Hon’bleSupreme Court has made the following observation to the effect that penalty is notleviable when the assessee was under bona fide belief that the transaction doesnot attract the taxing provision:“Penalty will not be imposed merely because it is lawful to do so.Whether penalty should be imposed for failure to perform a statutoryobligation is a matter of discretion of the authority to be exercisedjudicially and on a consideration of all the relevant circumstances.Even if a minimum penalty is prescribed, the authority competent toimpose the penalty will be justified in refusing to impose penalty whenthere is a technical or venial breach of the provision of the Act orwhere the breach flows from a bona fide belief that the offender is notliable to act in the manner prescribed by the statute.” "