2015 (11) TMI 701 - AT - Central Excise

Denial of CENVAT Credit - Capital goods - Held that - Allegation against the appellant is that they have availed wrong cenvat credit and action of appellant is suppression of facts. In the show cause notice it was mentioned that the availment of cenvat credit on these items has been explained by the appellant with an evidence and was supported by certificate issued by Chartered Engineer for usage of items in capital goods which both the lower authorities have not accepted. From the above the only inference can easily be drawn that it is appellants case that the impugned items have been used for fabrication of capital goods and to that extent certificate issued by Chartered Engineer was produced which was doubted by both the lower authorities. Therefore inference of suppression of facts cannot be drawn. Therefore after relying on the decision of Triveni Engineering & Industries Ltd. (2015 (1) TMI 760 - ALLAHABAD HIGH COURT) I hold that in this case the allegation of suppression of facts is not sustainable against the appellant. Consequently extended period of limitation is not invokable. - demands against the appellant are barred by limitation. Consequently impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Denial of Cenvat credit on steel items as capital goods under Rule 2(a) of Cenvat Credit Rules, 2004.
2. Applicability of extended period of limitation for invoking demands.

Analysis:
1. The appellant appealed against the denial of Cenvat credit on steel items like HR plates, HR coil, sheet, plate, and shape & section, contending that these were used in plant and machinery. The audit in 2008 led to a letter for credit reversal, followed by a show cause notice in 2011. The appellant argued the limitation aspect, citing a High Court decision and emphasizing the time gap between audit and notice issuance. The Revenue alleged wrongful credit availing and suppression of facts, but the appellant's explanation supported by a Chartered Engineer's certificate was not accepted by lower authorities. The Tribunal noted that if it was a case of wrong credit availment, suppression wouldn't apply. Relying on a similar case precedent, the Tribunal held the suppression allegation unsustainable due to the appellant's evidence, thus rejecting the extended limitation period invocation.

2. The Tribunal referenced a case where the High Court ruled that mere omission without intent to evade tax doesn't warrant invoking the proviso to Section 11A. In this case, the appellant's explanation and evidence indicated legitimate use for capital goods fabrication, challenging the suppression claim. The Tribunal found the lower authorities' doubts on the certificate insufficient to establish suppression. Consequently, the Tribunal concluded that the demands against the appellant were time-barred, setting aside the impugned order and allowing the appeal with any consequential relief.