2013 (2) TMI 803 - HC - Central Excise

Summary

Issues involved:
The issues involved in this case include the justification of the Tribunal in remanding the case for de novo adjudication, compliance with Rule 7(1) of Cenvat Credit Rules, differentiation between "supplier" and merchant/traders, permissibility of proceedings for denial of Cenvat credit, treatment of the appellant in comparison to registered persons falling under different rules, applicability of the principle laid down in a previous case, application of the extended period of limitation, and interpretation of Rule 7(2) of Cenvat Credit Rules.

Issue 1: Tribunal's decision to remand the case for de novo adjudication
The appellant questioned the Tribunal's justification in remanding the case to the original adjudicating authority for de novo adjudication, with conclusive findings on the issues involved. The Division Bench found that the documents and invoices issued by the registered licensee were genuine, and there were no fraud allegations against the appellant. Consequently, the Tribunal's remand was deemed unnecessary as the claim was time-barred.

Issue 2: Compliance with Rule 7(1) of Cenvat Credit Rules
The appellant contended that they had complied with the provisions prescribed under Rule 7(2) of the Cenvat Credit Rules, 2002, by filing statutory monthly returns and Cenvat abstracts. The show cause notice alleged that the appellant had wrongly taken credit on endorsed invoices from non-existent manufacturers. However, the appellant argued that they had received grey fabrics under suppliers' challans along with endorsed invoices, with feasible details of the suppliers discernible.

Issue 3: Differentiation between "supplier" and merchant/traders
The Tribunal differentiated between the terms "supplier" and merchant/traders concerning Rule 7(1)(e) of the Cenvat Credit Rules, 2002. The appellant questioned this differentiation based on the clear provision contained in the rule, arguing that the names and addresses of the supplied traders/merchants were properly identified and goods were procured under proper endorsement on the invoices.

Issue 4: Permissibility of proceedings for denial of Cenvat credit
The Tribunal's decision to initiate proceedings against the appellant for denial of Cenvat credit was challenged. The appellant questioned whether such proceedings were permissible in the circumstances of the case and whether they were not barred by limitation as prescribed under the proviso to Section 11A(1) of the Central Excise Act, 1944.

Issue 5: Treatment of the appellant in comparison to registered persons under different rules
The Tribunal's order, treating the appellant at par with registered persons falling under a different rule, was contested. The appellant argued that they were registered under a specific rule much prior to the introduction of a new textile scheme, and therefore, should not be equated with those under a different rule.

Issue 6: Application of the principle from a previous case
The Tribunal's reliance on the principle laid down in a previous case was questioned by the appellant. They argued that the facts and circumstances of the present case were different from the case referred to, and therefore, the principle should not have been applied without considering the distinctions.

Issue 7: Application of the extended period of limitation
The Tribunal's application of the extended period of limitation was challenged by the appellant. They questioned whether the Tribunal was justified in applying the ratio laid down in a specific case, ignoring a more recent judgment of the Hon'ble Supreme Court produced during the hearing before the Tribunal.

Issue 8: Interpretation of Rule 7(2) of Cenvat Credit Rules
The appellant contested the Tribunal's interpretation of Rule 7(2) of the Cenvat Credit Rules, particularly regarding whether the appellant had taken all reasonable steps within the meaning of the explanation to the rule. They argued for a different interpretation based on their compliance with the provisions.

This summary provides a detailed breakdown of the issues involved in the legal judgment, outlining the arguments and decisions made regarding each issue.