2015 (1) TMI 1325 - AT - Central Excise

Benefit of N/N. 63/95-CE dated 16.03.1995 - goods manufactured by the appellant, which were cleared to M/s. HAL, were further supplied to defence, the same were being cleared by the appellant without payment of duty - denial of benefit of notification on the ground that the notifications in question grant exemption to M/s. HAL and not to the vendors of HAL - time limitation - Held that - certificates handed over to the appellant duly signed by CSIO or aeronautic development agency and based on which the appellant availed the benefit of notification. Even if the fact that they were not signed by the proper officer is admitted, no suppression or mis-declaration can be attributed to the assessee so as to invoke the longer period of limitation - as is seen from the certificate, the person signing the same is holding the rank in pay scale higher than the Deputy Secretary to Government of India in which case even though the certificates were not signed by Deputy Secretary, the same should be accepted. Further the Superintendent in his letter dated 28.10.2013 has also verified the said certificates and has reported that the same appears to be adequate - demand cannot be held sustainable on the point of limitation itself - appeal allowed by way of remand.

Summary

Issues:
1. Availability of exemption notifications to vendors of specified manufacturers.
2. Denial of cenvat credit and duty demands.
3. Proper certification for availing exemption benefits.
4. Limitation period for duty demands.
5. Applicability of Notification No. 6/2006-CE.

Analysis:

1. The appellants were engaged in manufacturing excisable goods supplied to M/s. HAL, exempted from duty under relevant notifications. A show-cause notice was issued demanding duty as the notifications allegedly granted exemption to HAL, not vendors. The Commissioner confirmed duty on final products cleared, denying cenvat credit, citing lack of proper cenvat account maintenance by the appellants.

2. The advocate argued confusion regarding notification applicability to vendors due to conflicting interpretations. The Tribunal had previously set aside demands against vendors based on clarifications, later withdrawn by the Board. The advocate contended the differing views justified the confusion, precluding malafide intentions for invoking a longer limitation period.

3. The appellants maintained that proper cenvat credit accounts were verified by a Superintendent under the RTI Act, contradicting the Commissioner's claim of incorrect account maintenance. The advocate agreed to pay the demand within the limitation period but sought neutralization against available cenvat credit.

4. The Revenue argued that certificates produced by the appellants were not signed by the proper officer as required by certain notifications, rendering them invalid. However, the Tribunal found the certificates signed by CSIO and aeronautic development agency sufficient, especially considering the signatory's rank exceeding that of the Deputy Secretary.

5. The Tribunal found the demand unsustainable due to the limitation period, as no malafide intent was established. Regarding Notification No. 6/2006-CE, the appellants claimed ignorance of HAL's use of goods and relied on HAL's certification for maintenance and repair. As the demand was time-barred, no liability was imposed.

In conclusion, the Tribunal set aside the impugned order, remanding the matter for a fresh decision by the Commissioner, limiting the demand within the limitation period, granting cenvat credit benefits, and requantifying the demand with cum-duty benefits. The penalty imposed was set aside due to the absence of suppression by the appellant.