2015 (10) TMI 1195 - AT - Central Excise

Denial of Cenvat Credit - Suppression of facts - Penalty u/s 11AC - Held that - As per findings of the Adjudicating Authority, it is clearly evident that there was no suppression of fact with intent to evade payment of duty on the part of the appellant. So, the extended period of limitation would not be invoked. - I set-aside the demand of Cenvat Credit alongwith interest as barred by limitation - Decided in favour of assessee.

Summary

Issues: Denial of Cenvat Credit, Limitation, Imposition of Penalty

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the appellant appealed against the denial of Cenvat Credit amounting to Rs. 4,47,180.00. The appellant contested the denial of Cenvat Credit primarily on the grounds of limitation and merit. It was argued that the denial of Cenvat Credit for the specified period was time-barred by a Show Cause Notice issued on 11.08.2010. The Adjudicating Authority decided not to impose a penalty under Section 11 AC of the Central Excise Act, 1944, as there was no intention to suppress facts to evade duty payment.

The Adjudicating Authority acknowledged that the appellant had wrongly availed Cenvat Credit on invoices from a specific supplier but noted that the goods were actually received and used in the manufacturing process, with appropriate duty paid on the finished goods. The Authority also recognized that the appellant had received proof of receipt in the form of Lorry Receipts, endorsed by state authorities. It was highlighted that due to the nature of the transaction, where original invoices from manufacturers or first-stage dealers were not received, it was reasonable for the appellant to rely on the supplier's invoice, especially when the tariff description matched. Based on these findings, the Adjudicating Authority concluded that there was no intent to evade duty payment, leading to the decision that the extended period of limitation would not be invoked.

Consequently, the Appellate Tribunal, after reviewing the Adjudicating Authority's findings, determined that there was no suppression of facts to evade duty payment by the appellant. As a result, the demand for Cenvat Credit, along with interest, was set aside as barred by limitation. The judgment allowed the appeal filed by the appellant, without delving into the merits of the case, emphasizing the absence of intentional misconduct in the Cenvat Credit claim.