2013 (12) TMI 813 - AT - Central Excise

Payment of duty on waste and scrap of inputs and capital goods Cenvat credit availed or not Held that - Relying upon Commissioner of Customs vs. Auto Ignition Ltd. 2008 (4) TMI 43 - SUPREME COURT - The onus to allege and prove that the waste and scrap has arisen from the Cenvat credit is upon the revenue - No presumption can be made - the Revenue has not referred to any evidence reflecting upon the fact of availment of credit - Neither the adjudication order nor the order in appeal refers to any evidence or entries in RG 23 A Part I or Part II indicating availment of credit - the Revenue has miserably failed to discharge the onus - Mere non-information to the Revenue, cannot be held to be a circumstances reflecting upon the malafide of the assessee - the view that demand is barred by limitation Decided in favour of Assessee.

Summary

Issues:
Payment of duty on waste and scrap of inputs and capital goods, availment of Cenvat credit, onus of proof on Revenue, limitation period for demand.

Analysis:

Payment of Duty on Waste and Scrap:
The dispute in the appeal revolves around the payment of duty on waste and scrap of inputs and capital goods. The Revenue contends that duty should be discharged on the sale of waste and scrap as Cenvat credit was availed on the original goods. However, the appellant argues that no credit was taken on the goods, hence no duty payment is required.

Availment of Cenvat Credit:
The appellant asserts that they never availed Cenvat credit on the disputed goods, shifting the burden of proof to the Revenue. The appellant relies on legal precedents, including a Supreme Court decision and a Tribunal ruling, emphasizing that the onus of proving credit availment lies with the Revenue. The appellant's representative's statement supports the claim of non-availment of credit.

Onus of Proof on Revenue:
The Tribunal highlights that the Revenue failed to provide evidence of credit availment despite the appellant's assertions. The show cause notice and subsequent orders did not reference any proof of credit availment, contrary to the legal requirement. The Tribunal emphasizes that the burden of proof rests on the Revenue, and without such evidence, the demand cannot be sustained.

Limitation Period for Demand:
Regarding the limitation period, the Revenue issued a show cause notice in 2002 for sales made in 1997-1999, invoking an extended period. The appellant argues that the delay in informing the Revenue about the sales does not indicate malafide intent to evade duty. The Tribunal concurs, stating that there is no evidence of malafide actions by the appellant, a public sector undertaking, and rules the demand as barred by limitation.

Conclusion:
Ultimately, the Tribunal sets aside the impugned order, ruling in favor of the appellant due to the Revenue's failure to prove credit availment and the demand being time-barred. The appeal is allowed with consequential relief granted to the appellants, emphasizing the importance of meeting the burden of proof and adhering to limitation periods in such cases.