2012 (6) TMI 123 - AT - Central Excise

Demand of duty and equivalent penalty on it - Assessee contention that the demand is time-barred as SCN issued by invoking extended period of limitation - Held that - The allegation of suppression with intent to evade payment of duty is not sustainable as the records clearly depicts that the appellants were filing necessary returns showing taking of credit and utilizing the same for payment of duty during the period in question - set aside the demand and the consequential penalty as time-barred - in favour of assessee.

Summary

Issues:
1. Demand of Rs 20,12,814/- confirmed and penalty under Section 11AC of the Act.
2. Denial of credit on specific items.
3. Time-barred Show Cause Notice.
4. Allegation of suppression with intent to evade payment of duty.
5. Admissibility of credit on structural items.

Analysis:
1. The appellant filed an appeal against a demand of Rs 20,12,814/- and penalty under Section 11AC of the Act, confirming the denial of credit on various items. The appellant contended that the demand was time-barred as the Show Cause Notice was issued invoking an extended period of limitation for the period from 1994-95, alleging suppression of facts to evade duty payment.

2. The appellant argued that the credit was availed on the disputed items as capital goods and monthly returns were filed. Although a previous Show Cause Notice had been issued in 1995, which was resolved with a penalty, a subsequent notice in 1999 denied credit on the grounds that the items were not capital goods. The appellant maintained that necessary documents were submitted at the time of taking credit, refuting the allegation of suppression.

3. The Revenue contended that the appellant had not produced duty paying documents at the time of availing credit, indicating suppression with intent to evade duty payment. Citing precedents, the Revenue argued against the admissibility of credit on certain items, relying on tribunal and Supreme Court decisions to support their stance.

4. The Tribunal found that the Show Cause Notice issued in 1999 for the period 1994-95 was time-barred, as the appellant had been regularly filing returns and utilizing credits for duty payments during the period in question. Additionally, the Tribunal referred to a previous decision in the appellant's favor regarding the admissibility of structural items for credit as capital goods, which was upheld by the Bombay High Court.

5. Based on the findings and precedents, the Tribunal concluded that the allegation of suppression with intent to evade duty payment was not sustainable. Consequently, the demand and penalty were set aside as time-barred, and the appeal was allowed in favor of the appellant.