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2015 (10) TMI 2073 - AT - Central ExciseReversal of CENVAT Credit - removal of inputs as such - determination of amount to be reversed - transaction value - Held that - Show cause notice was issued for the extended period of limitation.There are various Board Circulars on this issue which was decided by the Larger Bench of the Tribunal in the case M/s Eicher Tractors (2005 (9) TMI 340 - CESTAT NEW DELHI) as distinguished in the decision of M/s National Engg India Ltd Vs CCE Jaipur I - 2010 (4) TMI 674 - CESTAT NEW DELHI . Recently the Tribunal in the case of M/s Panasonic AVC Networks India Co Ltd (2013 (11) TMI 980 - CESTAT NEW DELHI) passed order on the identical issue following the decision of the Larger Bench which was upheld by the Hon ble High Court. Thus the appellant acted on bonafide belief and the demand of duty alongwith interest for the extended period of limitation cannot be invoked. The Learned Advocate submits that the entire demand is barred by limitation. - Impugned order is set aside - Decided in favour of assessee.
Issues:
Demand of duty on inputs removal under Rule 3(4) of Central Excise Rules 2002, invocation of extended period of limitation for demanding Cenvat credit, conflicting judgments on limitation, bonafide belief of appellant, setting aside the impugned order on limitation. Analysis: Issue 1: Demand of duty on inputs removal under Rule 3(4) of Central Excise Rules 2002 The appellants were engaged in the manufacture of Bright Bars classifiable under Chapter 72 of the Central Excise Tariff Act 1985 and were availing Cenvat Credit on Inputs and Capital goods. The dispute arose when they removed various Inputs under Rule 3(4) of the Central Excise Rules 2002, leading to a demand of Central Excise duty along with interest and penalty. The Adjudicating authority and Commissioner (appeals) upheld the demand. The issue was contested on merits and limitation, with the Tribunal finding that the demand of duty may be decided on limitation. Issue 2: Invocation of extended period of limitation for demanding Cenvat credit The Tribunal analyzed the invocation of the extended period of limitation for demanding wrongly availed Cenvat credit. Referring to case laws and legal provisions, it was noted that the extended period can be invoked only in cases of fraud, collusion, wilful misstatement, suppression of fact, or contravention of provisions with intent to evade duty. The Tribunal emphasized the need for deliberate intent to evade payment of duty for the extended period to apply. It was observed that conflicting judgments and doubts on interpretation of rules prevented the invocation of the extended period in this case. Issue 3: Conflicting judgments on limitation The Tribunal discussed conflicting judgments on limitation and highlighted the importance of settled legal principles in determining the applicability of the extended period. Reference was made to the decision of the Supreme Court and the Hon'ble Allahabad High Court upholding the Tribunal's decision on limitation in a similar case. The Tribunal emphasized the significance of consistent legal interpretation in invoking the extended period of limitation. Issue 4: Bonafide belief of appellant and setting aside the impugned order on limitation Considering the appellant's bonafide belief, reliance on Board Circulars, and previous Tribunal decisions, the Tribunal set aside the impugned order on limitation without delving into the merits of the case. The appellant's actions were deemed to be based on a genuine belief, and the demand of duty for the extended period of limitation was held to be unsustainable. The Tribunal allowed the appeal filed by the appellant based on the above analysis. In conclusion, the judgment by the Appellate Tribunal CESTAT Ahmedabad focused on the issues of demand of duty on inputs removal, invocation of the extended period of limitation for demanding Cenvat credit, conflicting judgments on limitation, bonafide belief of the appellant, and ultimately setting aside the impugned order on limitation. The detailed analysis provided clarity on legal interpretations, emphasizing the need for deliberate intent to evade duty for the extended period to be applicable and the importance of settled legal principles in determining the scope of limitation.
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