2006 (12) TMI 361 - AT - Central Excise

Summary

Issues:
The appeal involves the issue of whether the appellants were entitled to take credit in their Cenvat credit account for Industrial Washing Machines received for refurbishing and modification, and whether the demand raised by the Department was barred by time.

Analysis:
The appellants received Industrial Washing Machines from M/s. TVS Suzuki Ltd. for refurbishing and modification, for which they paid duty and took credit in their Cenvat credit account. The Department contended that these goods were not capital goods for the manufacture of any items by the appellants, leading to a show cause notice being issued. The appellants argued that the notice was time-barred as all details were disclosed to the Department and there was no suppression of facts. They also maintained that they had paid the amount voluntarily on the repaired goods. The Tribunal noted that the appellants had disclosed all facts to the Department, and the Internal Audit party did not find any discrepancy during their check in 2002. Therefore, re-opening the issue after three years was considered time-barred. The Tribunal found no intention to evade payment of duty and allowed the appeal on the time bar issue with consequential relief.

Precedents:
The appellants relied on judgments such as Tamil Nadu Housing Board v. Collector of Central Excise, Madras [1994 (74) E.L.T. 9 (S.C.)], Collector of Central Excise v. HMM Ltd. [1995 (76) E.L.T. 497 (S.C.)], and Nizam Sugar Ltd. [2006 (197) E.L.T. 465 (S.C.)] to support their case for allowing the appeal.

Conclusion:
The Tribunal found that the appellants had acted in good faith, disclosed all relevant details to the Department, and there was no suppression of facts. Therefore, the confirmation of value addition was deemed not sustainable and barred by time. The appeal was allowed on the time bar issue with consequential relief, if any.