2015 (11) TMI 205 - AT - Central Excise

Duty demand - Availment of Cenvat credit - Bar of limitation - Held that - except for one letter dated 17.08.2005 from the Superintendent of Central Excise directing the appellant to produce original copy of RG23A part II, no other information was sought. I also find from the records in response to the letter dated 17.08.2005, appellant informed the Range officer that original RG23A part II was lying with them only. Despite so many correspondence entered into with the departmental authorities, the appellant by letter dated 30.05.2006 informed the Asst. Commissioner of Central Excise, Rasayani Division that they are taking recredit of the amount and did so by entry no. 940 dated 12.06.2006. It is not in dispute that the monthly excise return of June 2006 was filed with the Range authorities in time indicating therein the Cenvat credit availed by the appellant. - despite such clear intimation and information from the appellant s side in May 2006, revenue authorities issued a show-cause notice on 25.03.2011 invoking the extended period for seeking reversal of the amount of ₹ 3,94,950/- which, in my view, is blatantly time barred. The allegations in the show-cause notice are also very bland inasmuch it only said that the assessee deliberately suppressed the fact of recredit which is in contravention of Rule 3 of CENVAT Credit Rules, 2004. - on the fact of such clear cut information given to the department for recredit of the amount in June 2006; the show-cause notice issued in 2011 is to be held as time barred and no suppression, misstatement is proved against the appellant. - impugned order is set aside on the point of limitation itself - Decided in favour fo assessee.

Summary

Issues involved: Cenvat credit availed by the appellant, eligibility of Cenvat credit, limitation period for show-cause notice, recredit of reversed amount, documentary evidence, suppression of facts, time-barred show-cause notice.

Analysis:

1. Eligibility of Cenvat Credit:
The appellant had availed Cenvat credit on spare of capital goods, which was reversed by the preventive officers in 1998. The appellant claimed that the credit availed was legal and legitimate. They had written reminders to the authorities from 1999 to 2006 requesting recredit, but no response was received. The Adjudicating Authority asked for records, but the appellant stated that the documents were lost in a flood in 2005. The department argued that the appellant failed to provide documentary evidence supporting their claim for Cenvat credit on capital goods and spares. The Larger Bench held that suo motu credit cannot be availed, and the appellant should follow the refund procedure.

2. Limitation Period for Show-Cause Notice:
The appellant reversed the amount in 1998 under advice from the Preventive officer and informed the authorities in 2000 about their eligibility for recredit. Despite various correspondences, the appellant informed the authorities in May 2006 about taking recredit. However, a show-cause notice was issued in 2011 invoking the extended period for seeking reversal, which was deemed time-barred by the tribunal. The tribunal noted that the department was aware of the recredit taken by the appellant in 2006, making the 2011 notice invalid due to being time-barred.

3. Recredit of Reversed Amount:
The appellant's factory was visited by the Preventive officer in 1998, who directed the reversal of Cenvat credit on certain items of capital goods. The appellant complied and reversed the credit. Subsequently, the appellant requested recredit based on their eligibility under Notification 25/96-CE. Despite clear communication with the authorities and timely filing of excise returns in 2006 reflecting the recredit, a show-cause notice in 2011 sought reversal, which the tribunal deemed time-barred and unsubstantiated.

4. Suppression of Facts:
The department alleged that the appellant suppressed the fact of recredit, contravening Rule 3 of CENVAT Credit Rules, 2004. However, the tribunal found this allegation unsubstantiated, noting that the appellant had clearly informed the department about the recredit in 2006. The tribunal held that the show-cause notice issued in 2011 was time-barred, and no suppression or misstatement was proven against the appellant.

In conclusion, the tribunal set aside the impugned order on the point of limitation alone, allowing the appeal in favor of the appellant.