2011 (4) TMI 238 - AT - Central Excise

Demand - Limitation - CENVAT credit - Appellants submits that the show-cause notice is barred by limitation as the appellants filed declaration of utilization of CENVAT credit on 08/04/2003 and thereafter they filed their calculation details of availment of CENVAT credit on 29/08/2003 and the show-cause notice was issued on 22/03/2007 alleging that the appellants have suppressed the excess availment of credit - As the appellants have already filed declaration before the department in 2003 itself showing the details of CENVAT credit availed, the allegation of suppression is not sustainable and, therefore, the extended period of limitation is not applicable to this case - Hence, the show-cause notice is barred by limitation and the demands are not sustainable

Summary

Issues:
1. Whether the show-cause notice is barred by limitation.
2. Whether the appellants suppressed facts to avail excess CENVAT credit.

Analysis:
1. The issue of limitation was raised by the appellant, arguing that the show-cause notice was issued beyond the prescribed time limit. The appellant contended that they had declared their CENVAT credit utilization in 2003 itself, well within the knowledge of the department. It was highlighted that the show-cause notice was issued in 2007, alleging suppression of facts. The Tribunal agreed with the appellant, stating that since the declaration was made in 2003 and the department took no action within the limitation period, the extended period of limitation could not be invoked in this case. Consequently, the Tribunal held that the show-cause notice was indeed barred by limitation.

2. The second issue revolved around whether the appellants had suppressed facts to claim excess CENVAT credit. The department alleged that the appellants had availed excess credit deliberately, amounting to Rs. 36,420, to utilize it for duty payment. The appellant argued that they had not suppressed any facts, as they had declared their credit availed in 2003 itself. The Tribunal concurred with the appellant's stance, stating that the allegation of suppression was unsustainable, as the department was aware of the credit availed in 2003. Consequently, the Tribunal held that the demands made based on the allegation of suppression were not sustainable. As a result, the impugned order was set aside, and the appeal was allowed with consequential relief.

In conclusion, the Tribunal found in favor of the appellant on both issues, ruling that the show-cause notice was barred by limitation and that the demands based on the allegation of suppression were not sustainable. The appellant's appeal was allowed, providing them with consequential relief in this matter.