2005 (4) TMI 447 - AT - Central Excise

Summary

Issues: Dispute regarding availing Modvat credit on endorsed invoices issued during a specific period.

Analysis:
1. The dispute in the case revolved around the availing of Modvat credit on endorsed invoices issued between 7-2-94 to 14-3-94, which was claimed during the period from 12-4-94 to 16-4-94. The contention was that the credit was taken based on endorsed invoices in April 1994, which were deemed invalid for credit. The duty demanded was Rs. 1,04,976.00 with an equal penalty imposed, along with interest. The argument was that the Gate Passes issued before 1-4-94 and subsequently endorsed were valid for credit, citing precedents supporting this claim.

2. The appellant argued that the demand was time-barred as the credit was taken in April 1994, while the show cause notice was issued on 20-4-1999. It was emphasized that there was no suppression of facts or intentional misstatement to evade duty payment, as evidenced by the submission of required documents to the department. Precedents were cited to support the limitation defense, highlighting the absence of any allegation of suppression in the notice.

3. The respondent supported the impugned order, which demanded disallowance of the credit claimed by the appellant.

4. The judgment considered the provisions of Notification 16/94-C.E. (N.T.) and Circular No. 14/89, which allowed Modvat credit on endorsed Gate Passes issued before 1st April 1994. Precedents were cited to support the appellant's entitlement to the credit based on the endorsed invoices. It was noted that the show cause notice did not clearly establish fraud, collusion, or misrepresentation to invoke an extended period of limitation. Citing relevant cases, the judgment concluded that in the absence of such evidence, the extended limitation period could not be applied. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants, granting them consequential relief.