2002 (8) TMI 769 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit and penalty imposition by Deputy Commissioner.
2. Contestation of show cause notice by appellants.
3. Confirmation of order-in-original by Commissioner (Appeals).
4. Validity of impugned order based on limitation.

Analysis:
1. The appellants challenged the disallowance of Modvat credit and penalty imposition by the Deputy Commissioner regarding the purchase of aluminium alloy ingots for manufacturing electronic exhaust fans. The Department alleged that the goods purchased were non-duty paid and cleared at NIL rate of duty, hence not eligible for Modvat credit. The Commissioner (Appeals) upheld the Deputy Commissioner's decision.

2. The appellants contested the show cause notice by denying the non-duty paid status of the goods and arguing that the demand was time-barred. They claimed that they had been transparent in their filings to the Department, including RT-12 returns, RG-23A, Parts I and II, and invoices. The Superintendent acknowledged their filings without raising any objections previously.

3. The validity of the impugned order was mainly challenged on the grounds of limitation. The appellants argued that the show cause notice was issued after the period of six months from the time Modvat credit was availed, and there was no suppression of facts by them. They contended that the extended period of limitation under Section 11A could not be invoked as all relevant information was disclosed to the Department.

4. After hearing both sides, the Tribunal concluded that the demand was time-barred as the show cause notice was issued after the expiry of the statutory period. The Tribunal found no suppression of facts by the appellants, as they had diligently filed all required documents with the Department. The Tribunal referenced a previous case to support its decision. Consequently, the impugned order of the Commissioner (Appeals) was set aside, and the appeal of the appellants was allowed with any consequential relief permissible under the law.