2013 (7) TMI 342 - AT - Central Excise

Limitation Extended period - Appellants are declaring along with annexure to their Central Excise returns filed monthly regarding the availment of CENVAT credit on the items in question - A query was raised vide letter dated 27.05.2009 and same was replied by the appellant vide letter dated 17.06.2009 and same as received in the office of the Commissioner of Central Excise, LTU, Mumbai on 19.06.2009 Held that - Availment of CENVAT credit was in the knowledge of the department on 19.06.2009 itself. Therefore, show-cause notices issued on 22.10.2010 by invoking the extended period of limitation are beyond the period of limitation as there is no fraud, collusion or mis-representation of facts or contravention of Act/Rules with an intend to evade payment of duty Appeal allowed Decided in favor of Assessee.

Summary

Issues involved:
- Disputed demand of CENVAT credit on specified goods as capital goods
- Invocation of extended period of limitation

Analysis:

1. Disputed demand of CENVAT credit on specified goods as capital goods:
The case involved a dispute regarding the denial of credit availed by the appellant on various steel items as capital goods. The revenue contended that these items were not specified goods eligible for credit as capital goods, leading to the issuance of a show-cause notice invoking the extended period of limitation. The appellant argued that the steel items were integral to the machinery and equipment used in their manufacturing units, emphasizing that these items were essential for the efficient functioning of the plants. The appellant relied on various judgments, including those of the Apex Court and High Courts, to support their claim that the steel items qualified as inputs for capital goods. The appellant's counsel highlighted the specific use of the steel items in fabricating technological structures necessary for the installation and operation of the machinery, thereby justifying the availed credit.

2. Invocation of extended period of limitation:
The appellant raised a strong argument on the limitation aspect, asserting that the revenue was aware of the credit availed on the steel items as capital goods due to the monthly returns filed by the appellant. A query raised by the department in May 2009 and the subsequent response from the appellant in June 2009 further demonstrated the department's knowledge regarding the credit availed. The acknowledgment of the appellant's response indicated that the department was informed about the credit availed well within the normal limitation period. The Tribunal observed that there was no evidence of fraud, collusion, misrepresentation, or contravention of laws to evade duty payment. Citing a previous judgment by the Hon'ble High Court of Bombay, the Tribunal noted that the issue of availing CENVAT credit on the disputed items was debatable and subject to stay, further supporting the appellant's position on the limitation aspect. Consequently, the Tribunal held that the show-cause notices issued beyond the normal limitation period were not justified, leading to the setting aside of the impugned order in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, primarily on the grounds of limitation, and allowed the appeal with consequential relief. The judgment highlighted the importance of timely communication and the department's awareness of the disputed credit availed by the appellant, ultimately leading to the dismissal of the demand raised by the revenue.