2007 (11) TMI 521 - AT - Central Excise

Summary

Issues:
1. Alleged irregular availing of Cenvat credit for vehicles sent for testing.
2. Allegations of suppression of facts and invocation of larger period.
3. Denial of charges by the appellants and contention regarding removal and sale of vehicles.
4. Discrepancy in findings between the authorities.
5. Time-barred show cause notice and confirmation of demands.
6. Legal interpretation of Rule 16 of Central Excise Rules.
7. Submission of supporting judgments by the appellants.

Analysis:
1. The appeal revolved around the alleged irregular availing of Cenvat credit for 12 vehicles sent for testing to a research association. The show cause notice accused the appellants of availing credit amounting to Rs. 1,34,699 without fulfilling the necessary conditions.

2. The department alleged suppression of facts and invoked a larger period for scrutiny. The appellants denied the charges, stating that the vehicles were sent for testing in compliance with statutory rules, defects were rectified, and vehicles were sold after payment of duty. They argued that all relevant facts were known to the department.

3. The authorities' findings differed regarding the removal of worn-out parts and irregular availing of Cenvat credit. The appellants contended that the allegations went beyond the scope of the show cause notice and that the show cause notice itself was time-barred, being issued belatedly in 2004 for a period from 2001 to 2002.

4. After hearing both sides, the tribunal noted discrepancies in the authorities' findings and the records. The appellants presented evidence to support their claim that vehicles were sold after rectification, not as worn-out parts. The tribunal found the authorities' conclusions to be beyond the show cause notice's scope.

5. The tribunal ruled in favor of the appellants, citing the show cause notice as time-barred and finding no irregular availing of Cenvat credit. The tribunal referenced supporting judgments to uphold the appellants' compliance with procedures and the absence of irregularities in availing credit.

6. Ultimately, the tribunal set aside the impugned order, allowing the appeal with any consequential relief. The decision highlighted the time-barred nature of the show cause notice, the absence of irregular credit availing, and the applicability of cited judgments to the case at hand.