2008 (5) TMI 503 - AT - Central Excise

Summary

Issues:
1. Time limitation for issuance of show cause notice under Rule 57-I and Section 11A.
2. Admissibility of credit on re-imported goods used in manufacturing final products.

Analysis:

1. Time limitation for issuance of show cause notice under Rule 57-I and Section 11A:
The case involved a dispute regarding the time limitation for issuing a show cause notice under Rule 57-I and Section 11A of the Central Excise Act, 1944. The Commissioner initially held that the show cause notice issued after one year of the goods' receipt was time-barred as the extended period under Section 11A was not invoked and no suppression or misrepresentation was alleged. The Commissioner (Appeals), however, considered the notice within time, stating that the demand under Section 11A was implicitly invoked. The Tribunal, citing the Supreme Court decision in the case of Kaur & Singh, emphasized that without allegations of fraud, suppression, or contravention to evade duty, the extended period cannot be applied. As there were no such allegations, the Tribunal ruled the show cause notice as time-barred and set aside the Commissioner (Appeals) order.

2. Admissibility of credit on re-imported goods used in manufacturing final products:
The appeal also addressed the admissibility of credit on re-imported goods used in manufacturing final products. The appellants re-exported rejected goods, re-imported them after paying CVD, and claimed credit for the duty paid. The department contended that the appellants failed to provide evidence of the goods' processing and the resulting manufactured products. The Tribunal noted that the appellants informed about clearing the goods for home consumption and export after processing, and without evidence to the contrary, credit could not be denied. The department argued that the appellants did not specify the processes the re-imported goods underwent, but the Tribunal found no requirement for such specificity. As the goods were processed and cleared for consumption and export, the credit was deemed admissible.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the Commissioner (Appeals) order due to the time-barred show cause notice and upheld the admissibility of credit on re-imported goods used in manufacturing final products based on the provided information and lack of evidence to the contrary.