2014 (11) TMI 1049 - AT - Central Excise

Extended period of limitation invoked - demand was confirmed and proposed equal amount of penalty was confirmed with interest - suppression on part of the appellant - Held that - As find that from ER-1 return para 5A and 5B of the same batch, the appellant have shown the break-up of duty as 8 2%, although it have inadvertently not shown the AED - GSI in column 5 (in para 5B). By practice in vogue, from casual look of the return, it is evident that when AED - GSI is leviable in addition to basic duty 8 2% indicates in column 5A that the appellant have charged basic duty AED GSI on his output during the period in dispute. In this view of the matter, I hold that there is no suppression of facts, or fraud etc. made out against the appellant. Thus, I hold that the Commissioner (Appeals) has erred in holding that the extended period is invocable. I further hold that in the facts and circumstances, Section 11A is not invocable and the provision of extended period of limitation is also not invocable. Thus, the impugned order is set aside and the appeal is allowed with consequential relief, if any.

Summary

Issues:
1. Whether there was suppression of facts by the appellant in availing Cenvat credit on input duty?
2. Whether the extended period under Section 11A is invocable in the present case?
3. Whether the appellant is liable for penalty under Section 11AC?

Analysis:

Issue 1: Suppression of Facts
The appellant, a hosiery goods manufacturer, availed Cenvat credit on input duty and utilized it for payment of output duty. The Revenue alleged that the appellant wrongly took credit and issued a show cause notice for demanding the differential duty. The appellant contended that there was no deliberate default or suppression of facts, citing the bona fide belief in claiming set off. The appellate tribunal examined the appellant's ER-1 returns and found that although AED-GSI was not explicitly mentioned in one column, the duty breakup indicated the correct payment of duty. Relying on precedents, the tribunal held that there was no suppression of facts or intention to evade duty by the appellant.

Issue 2: Extended Period under Section 11A
The Revenue invoked the extended period under Section 11A, alleging suppression by the appellant. However, the tribunal disagreed, stating that the appellant's actions did not amount to suppression or fraud. By analyzing the return details and duty calculations, the tribunal concluded that the extended period was not applicable in this case.

Issue 3: Penalty under Section 11AC
The Revenue sought to impose a penalty under Section 11AC, contending suppression on the appellant's part. The tribunal, after evaluating the facts and legal precedents, held that since there was no suppression or deliberate default by the appellant, the penalty under Section 11AC was not warranted. The tribunal set aside the impugned order and allowed the appeal in favor of the appellant, granting consequential relief.

In conclusion, the appellate tribunal ruled in favor of the appellant, rejecting the allegations of suppression of facts and evasion of duty. The tribunal held that the extended period under Section 11A was not applicable, and no penalty under Section 11AC was justified. The impugned order was set aside, and the appeal was allowed with any necessary consequential relief.