2016 (12) TMI 1642 - AT - Central Excise

CENVAT credit - denial of credit on the ground that the respondent removed inputs (Granulated Slag) as such without reversal of credit - Held that - the concerned officer was not aware about the removal of the duty paid inputs. In other words the respondent should have declared the clearance of duty paid inputs in their returns specifically - appeal allowed - decided in favor of Revenue.

Summary

Issues:
Appeal against an order setting aside Adjudication order due to limitation on Cenvat Credit denial for removal of inputs without reversal.

Analysis:
The case involved an appeal by the Revenue against an order where the Commissioner (Appeals) set aside the Adjudication order due to the show cause notice being barred by limitation. The respondent, a manufacturer of Portland Slag Cement, faced a show cause notice proposing to deny Cenvat Credit amounting to ?10,36,867 for the period from 2008-09 to 2011-12. The notice alleged that the respondent removed inputs (Granulated Slag) without reversing the credit. The Adjudicating Authority disallowed the credit along with interest and imposed a penalty. The Commissioner (Appeals) set aside the Adjudication order citing limitation as the ground.

Upon hearing both sides and examining the records, the Adjudicating Authority found that the respondent had used duty paid and non-duty paid Granulated Slag without proper declaration in their returns. The Authority noted the suppression of facts regarding the removal of inputs without payment of duty, leading to willful contravention of the law to evade excise duty payment. The Commissioner (Appeals) observed discrepancies in the respondent's ER-I returns, where there was no corresponding entry of Cenvat credit utilized for the clearance of inputs as such. The Commissioner upheld the Adjudicating Authority's decision, emphasizing the importance of declaring duty paid inputs in returns to avoid confusion. The Commissioner rejected the applicability of a previous Tribunal decision cited by the respondent's counsel.

Ultimately, the Tribunal upheld the Adjudicating Authority's order and set aside the Commissioner (Appeals) decision. The appeal by the Revenue was allowed, emphasizing the necessity of proper declaration and compliance with excise duty regulations. The judgment was pronounced in open court on 28.12.2016.