2013 (12) TMI 393 - AT - Central Excise

Invocation of extended period of limitation Held that - There is no mention in the Show Cause Notice with regard to invoking extended provision against the appellant Following Commissioner Central Excise Commissionerate Vs. VAE VKN Industries Pvt Ltd 2013 (10) TMI 30 - PUNJAB & HARYANA HIGH COURT - there is no case of demand of interest invoking extended period of 5 years - the demand has been raised beyond the 1 year Show Cause Notices are clearly hit by the time limitation and the time barred the time limitation of 1 year from the relevant date for recovery of the principal amount will also be applicable for recovery of interest as well - Decided in favour of Assessee.

Summary

Issues:
1. Applicability of time limitation for demanding interest.
2. Verification of Cenvat Account balance for interest calculation.
3. Invocation of extended provision for interest demand.
4. Interpretation of time limit for interest recovery.

Analysis:
1. The appeals involved a dispute regarding the applicability of a one-year time limitation for demanding interest. The appellant argued that the time limitation should also apply to interest recovery, citing relevant judgments. The respondent, however, relied on a Supreme Court decision and previous Tribunal rulings to support their stance on interest payment related to duty paid on supplementary invoices.

2. The Tribunal remanded the matter to verify the balance in the Cenvat Account, which was crucial for determining the interest amount. The Assistant Commissioner found a lack of balance in the Cenvat Account, leading to a demand for interest from the appellants. The absence of sufficient balance necessitated interest payment as per the law, irrespective of the time limit not being explicitly discussed in the adjudicating order.

3. The absence of any mention in the Show Cause Notice regarding the invocation of extended provisions against the appellant was noted. This omission indicated a lack of grounds for demanding interest under an extended period of five years, as clarified by a High Court ruling. The Tribunal deemed the Show Cause Notices time-barred due to being raised beyond the one-year limit.

4. In evaluating the case of M/s International Auto Limited, the Tribunal referenced a previous decision involving EMCO Ltd. to determine the applicable time limit for interest recovery. Dismissing the argument for a five-year extended period, the Tribunal concluded that the one-year time limit was indeed relevant. Consequently, the Show Cause Notices were deemed time-barred, leading to the setting aside of the Orders in Appeal and the allowance of the appeals.