2011 (11) TMI 185 - AT - Central Excise

Entitlement of Cenvat credit of duty paid on provisionally assessed Bill of Entry - Rule 9 of the Cenvat Credit Rules, prescribes the documents on which the credit could be taken by the manufacturer. Rule 9(1) C stating Bill of Entry does not state that Bill of Entry should be finally assessed. Goods cannot be cleared from the Customs unless the Bill of Entry is assessed. Therefore, the entry at Rule 9(1) C will include the Bill of Entry either provisionally assessed or finally assessed. - Decided in favor of assessee

Summary

Issues:
- Entitlement to avail Cenvat credit of duty paid on provisionally assessed Bill of Entry
- Time limitation for issuance of show-cause notice

Entitlement to avail Cenvat credit of duty paid on provisionally assessed Bill of Entry:
The appellants, manufacturers of catalyst, imported raw materials and cleared products paying Central excise duty. The department contended that as per Rule 9 of the Cenvat Credit Rules, 2004, provisionally assessed Bill of Entry is not a valid document for availing credit of duties paid. A show-cause notice was issued demanding repayment of Cenvat credit availed by the appellants. The appellants argued that all parameters for credit entitlement were met, and the Bill of Entry, whether provisional or final, is eligible for credit under Rule 9(1) of the Cenvat Credit Rules. The Tribunal agreed, stating that the Customs Act allows for provisional assessment, and goods cannot be cleared without assessment. Therefore, denial of credit based on provisional assessment was unfounded. The Order-in-Original was set aside, and the appeal was allowed.

Time limitation for issuance of show-cause notice:
The department applied the extended period of limitation, alleging suppression of facts by the appellants regarding Cenvat credit availed. The appellants argued that no suppression occurred as audits were conducted, and credit was openly utilized. They contended that the show-cause notice was time-barred. The Tribunal found in favor of the appellants, stating that audits were conducted during the period in question, and the department failed to prove suppression of facts. Therefore, the show-cause notice was deemed hit by the time limitation, supporting the appellants' argument.

In conclusion, the Tribunal ruled in favor of the appellants, allowing them to avail Cenvat credit on provisionally assessed Bill of Entry and rejecting the department's demand for repayment. The time limitation for the show-cause notice was upheld in favor of the appellants, highlighting the importance of fulfilling parameters for credit entitlement and the need for timely and substantiated allegations in legal proceedings.