2013 (10) TMI 442 - AT - Central Excise

CENVAT credit - duty paying documents - endorsement on the back of the bill of entry (BE) without issuing invoices Waiver of Pre-deposit - Held that - The endorsement on bills of entry by M/s. Hero Exports instead of issuing a separate invoices does not advance Revenue s case - endorsements made by M/s. Hero Exports on the reverse of bill of entry which clearly give all the particulars as also the specifications etc. which are necessary for the purpose of availment of credit - even if the Revenues stand as regards the violation of notification No. 53/03 and 90/06 are accepted at this prima facie stage, availment of credit by Hero Ecotech Ltd. would be violation of those customs notification and cannot have any reflection on availment of credit by the manufacturers who has admittedly paid the duty on the final product - deposit of Rs. One crore in that case can be deemed to be a deposit out of total denied Cenvat credit stay granted. Extended Period of Limitation Held that - E-bikes which are dutiable during the relevant period were specifically exempted vide notification No. 25/08 with effect from 29.4.08 - At that point of time, appellant as having credit in their credit account, for which the Revenue raised the show cause notice, seeking reversal of such credit - Revenue was aware of the availment of credit in respect of parts of the e-bikes when it issued the show cause notice for reversal of credit on the final product becoming exempted - prima facie show cause notice issued invoking the longer period of limitation was barred by limitation Decided in favour of Assessee.

Summary

Issues:
Dispute over Cenvat credit of customs duty paid by the importer and utilized by the job worker; Disallowance of credit by adjudicating authority; Denial of Cenvat credit to job worker by the Commissioner; Imposition of penalties on the job worker and importer; Invocation of longer period of limitation for demands; Barred limitation for show cause notice issuance; Tribunal's stay order directing deposit by the appellant; Entitlement to unconditional stay.

Analysis:
The judgment involves a dispute concerning the Cenvat credit of customs duty paid by the importer, M/s. Hero Exports, and utilized by the job worker, Hero Ecotech Ltd., for the manufacture of final products. The adjudicating authority disallowed the credit, citing procedural grounds such as endorsement on the bill of entry instead of separate invoices. The Commissioner denied the Cenvat credit to the job worker, Hero Ecotech Ltd., based on technicalities like the absence of their name as a supporting manufacturer in the license issued by DGFT. Penalties were imposed on both entities, leading to the present appeal.

The Tribunal found that the duty was indeed paid by M/s. Hero Exports at the time of clearance, and the credit was utilized by Hero Ecotech Ltd. for the final product, which was cleared after payment of duty. Technical objections raised by the Revenue regarding endorsements on bills of entry were deemed insufficient to support the Revenue's case. Despite potential violations of customs notifications, the Tribunal held that the job worker's availing of credit did not affect the manufacturer's legitimate credit utilization.

Moreover, the Tribunal noted that demands were issued invoking a longer period of limitation, but the show cause notice issued beyond the limitation period was considered barred by limitation. The Tribunal highlighted that the Revenue was aware of the credit availment well before the extended period, indicating a lack of justification for invoking the longer limitation period. Additionally, the Tribunal referenced a previous case where a deposit was made by the appellant in compliance with the Tribunal's stay order, which was now being denied to them. Consequently, the Tribunal concluded that the appellant was entitled to unconditional stay and ordered accordingly, emphasizing the various grounds for their decision.

In conclusion, the judgment addresses multiple legal issues related to Cenvat credit, procedural compliance, limitation periods, and the Tribunal's previous directives. The analysis provides a detailed examination of the factual background, the arguments presented, and the Tribunal's reasoning behind granting the appellant an unconditional stay in light of the circumstances presented during the proceedings.