2014 (1) TMI 955 - AT - Central Excise

Time-barred demand - Denial of credit on Capital goods used to fabricate a blast furnace - Waiver of Pre-deposit Held that - The appellant disclosed the material facts to the Department on 10/05/2004 and that the Range Officer noted the total accumulated MODVAT credit as available to the party - Whether the Superintendent was legally authorized to make such notings is not a matter of concern presently - the show-cause notice issued in September 2008 is prima facie time-barred Thus Pre-deposits waived till the disposal stay granted.

Summary

Issues:
1. Denial of CENVAT credit for the period from 1996 to 1999 and 2004.
2. Jurisdiction of provisions invoked in the show-cause notice.
3. Time-barred demand due to disclosure of material facts.
4. Validity of notings by Range Officer.

Analysis:
1. The appellant sought waiver and stay for adjudged dues, including Rs.31,05,981/- denied as CENVAT credit for using capital goods to fabricate a blast furnace. The show-cause notice issued in 2008 sought recovery under Central Excise Act and CENVAT Credit Rules, with demands confirmed by the original authority and Commissioner(Appeals).

2. The appellant argued that the demand lacked jurisdiction as the invoked provisions were not applicable during the main dispute period. They contended that material facts were disclosed in a detailed letter in 2004, making the demand time-barred. The Department claimed the first return filed in 2005 showed a 'nil' opening balance, alleging suppression of facts. The Tribunal found a prima facie case for the appellant based on limitation, noting that material facts were disclosed in 2004, making the 2008 notice time-barred.

3. The Tribunal considered the Range Officer's notings on the material facts disclosed in 2004, disregarding concerns about the officer's legal authorization. The notings indicated the available MODVAT credit for the party. Given this, the Tribunal concluded that the 2008 show-cause notice was prima facie time-barred, granting the waiver and stay as requested by the appellant.

4. The judgment emphasized the importance of timely disclosure of material facts to the Department and highlighted the significance of the Range Officer's notings in assessing the limitation period for issuing demands. Despite concerns about the officer's authority, the Tribunal focused on the factual disclosure made by the appellant in 2004 to determine the time-barred nature of the 2008 notice, ultimately ruling in favor of the appellant based on the limitation grounds.