9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 152 - AT - Central ExciseWrongful availment of CENVAT Credit - Interest u/s 11AB - Penalty u/s 11AC - Held that - It is seen from the show cause notice that the appellant reversed the credit in the monthly ER1 return which was audited by the Central Excise audit party during the period 2004-2006. The Central Excise audit party after examining the ER1 return, detected the non-payment of interest. Show cause notice was issued on 8.8.2011 after more than 4 years. The Adjudicating Authority had given a clear finding that there is no suppression of fact with intent to evade payment of duty and dropped the penalty under Section 11AC of the Act. - liability of the payment of interest under Section 11AB linked with sub section (2) or (2B) of Section 11A where the limitation is prescribed. In the present case, the demand notice was issued beyond the period of limitation as prescribed under Section 11A (2B) of the said Act and therefore the demand of interest could be not sustained. - Tribunal in the case of Gujarat State Fertiliser Co Ltd (2013 (9) TMI 581 - CESTAT AHMEDABAD) on the identical situation set aside the demand of interest as time barred. - impugned order to the extent of demand of interest is set aside. - Decided in favour of assessee.
Issues:
1. Liability to pay interest on wrongly availed cenvat credit. 2. Applicability of limitation period for issuing show cause notice. 3. Interpretation of Section 11AB of the Central Excise Act 1944. 4. Suppression of fact with intent to evade payment of duty. 5. Applicability of penalty under Section 11AC of the Act. Analysis: 1. The case involved the appellants, engaged in manufacturing TMT Bars, who had wrongly taken cenvat credit during a specific period. The Central Excise audit party detected this error during a scrutiny, leading to the issuance of a show cause notice proposing the demand of interest and penalty. The Adjudicating Authority confirmed the demand of interest but dropped the penalty under Section 11AC. The Commissioner (Appeals) upheld this decision. 2. The appellant argued that the show cause notice issued after several years was barred by limitation as they had voluntarily reversed the credit in a previous period. They cited precedents to support their claim that the notice was time-barred. 3. The Tribunal analyzed Section 11AB of the Central Excise Act 1944, which deals with the payment of interest on delayed duty payment. The section links the liability to pay interest with Section 11A(2) or 11A(2B), which prescribe a limitation period for issuing notices. The Tribunal emphasized that the demand notice must adhere to the prescribed limitation period. 4. The Adjudicating Authority found no suppression of fact with intent to evade duty payment, leading to the dropping of the penalty under Section 11AC. This observation played a crucial role in the decision regarding the penalty imposition. 5. The Tribunal referred to previous judgments, such as TVS Whirlpool Ltd and Gujarat State Fertilizers Co Ltd cases, to support its decision. These cases highlighted the importance of adhering to the prescribed time limits for demanding interest, emphasizing that the period of limitations for the principal amount should also apply to interest claims. The Tribunal ultimately set aside the demand of interest, allowing the appeal with consequential relief. In conclusion, the judgment delves into the intricacies of cenvat credit reversal, liability for interest payment, interpretation of relevant sections of the Central Excise Act, and the significance of adhering to limitation periods for issuing show cause notices and demanding interest.
|
