2014 (8) TMI 478 - AT - Central Excise

Cenvat Credit - Clearance of capital goods as such - evidence - reversal of credit - Invocation of extended period of limitation - Held that - The authorities have not bothered to look into the date of receipt of capital goods and date of sale of the same, which would enlighten as to whether the capital goods were received without being used or not. Merely because the appellants could not produce the evidence (as they did not attend the personal hearing), the Revenue cannot assume that the capital goods were sold as such. It has to be kept in mind that it is the Revenue who is making the allegations and as such, the onus to show that the goods were cleared as such thus requiring reversal of modvat credit, is on the Revenue. - all the figures have been taken from the balance sheet of the applicant, and as such, at this prima facie stage, it cannot be said that there was any suppression on the part of the applicant. Thus, invocation of longer period was not justified - Stay granted.

Summary

Issues:
1. Demand of duty raised against the appellant for clearing capital goods with modvat credit.
2. Rejection of appellant's plea by Commissioner (Appeals) due to lack of documentary evidence.
3. Allegations of suppression by the Revenue and invocation of longer period.
4. Dispensing with the pre-deposit condition for a public sector undertaking.

Analysis:
1. The judgment addresses the demand of duty amounting to &8377;2,67,979 raised against the appellant for allegedly clearing capital goods with modvat credit by paying a lesser duty. The appellant contended that the goods were not cleared as such, but sold as waste and scrap, with appropriate duty paid on the transaction value. The Tribunal noted the appellant's stance and considered the issue in light of the impugned order.

2. The Commissioner (Appeals) rejected the appellant's plea, citing a lack of documentary evidence to prove that the capital goods were sold as scrap and not as such. The Tribunal criticized the authorities for not examining crucial details such as the dates of receipt and sale of the capital goods, which could have clarified the usage status. The Tribunal emphasized that the burden of proof lies with the Revenue, and mere absence of evidence due to the appellant's non-attendance does not justify assuming the goods were cleared as such.

3. Additionally, the Tribunal observed that the figures were derived from the applicant's balance sheet, indicating no prima facie suppression by the appellant. Consequently, the Tribunal deemed the invocation of a longer period unjustified. The judgment highlights the importance of thorough investigation by the Revenue before alleging non-compliance, especially in cases involving complex transactions like modvat credit utilization.

4. Considering the appellant's status as a public sector undertaking, the Tribunal decided to dispense with the pre-deposit condition for duty and penalty. This decision reflects a balanced approach, taking into account the nature of the appellant's entity and the circumstances surrounding the case. By allowing the stay petition unconditionally, the Tribunal upheld principles of fairness and equity in the adjudication process.