2018 (7) TMI 1957 - AT - Central Excise

Project import - CENVAT Credit - time limitation - credit denied on the ground that since the capital goods were imported after 1.3.1997, credit was available only to an extent of 75% of the duty paid as against 100% credit availed - HELD THAT - Rule 57U of the erstwhile Central Excise Rules, 1944 specifically deals with the eventuality in cases where no return in terms of sub-rule (10) of Rule 57T is filed - In the present case the SCN was issued beyond the period of six months from the relevant date i.e. date of filing of return of November 1997. Hence, the finding of the Commissioner (Appeals) that due date for filing return only is to be taken for computing the period of limitation cannot be faulted with. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Challenge to denial of credit on imported capital goods under Project Import Scheme
- Limitation period for issuance of Show Cause Notice

Analysis:

Challenge to denial of credit on imported capital goods under Project Import Scheme:
The appeal before the Appellate Tribunal arose from a dispute regarding the denial of credit on duty paid for capital goods imported under the Project Import Scheme. The Revenue contended that since the goods were imported after a certain date, credit should only be available to the extent of 75% instead of the 100% claimed by the Respondent. The adjudicating authority confirmed the demands, but the Commissioner (Appeals) set aside a substantial part of the demands on both merit and limitation grounds. However, a portion of the demand was still confirmed. The Revenue specifically challenged the dropped demand of RS.35,00,631 on the basis of limitation. The Commissioner (Appeals) had ruled that the Show Cause Notice issued on 10.09.1998 was time-barred as it related to credit from November 1997. The key issue revolved around the relevant date for computing the period of limitation in this context.

Limitation period for issuance of Show Cause Notice:
The crux of the matter lay in determining the relevant date for calculating the period of limitation for issuing the Show Cause Notice. The Ld. Authorized Representative for the department argued that the limitation period should start from the date the return for November 1997 was filed, which was 11.3.1998. On the contrary, the Ld. Counsel for the appellant contended that the due date for filing the return should be considered, making the Show Cause Notice issued on 10.9.1998 time-barred. The Tribunal analyzed Rule 57U of the Central Excise Rules, 1944, which specifically addresses the recovery of wrongly availed credit. Since the Show Cause Notice was issued beyond six months from the date of filing the return for November 1997, the Commissioner (Appeals) held that the due date for filing the return should be the relevant date for computing the limitation period. This interpretation was supported by a previous decision of the Tribunal in a similar context.

In conclusion, the Appellate Tribunal upheld the Commissioner (Appeals)'s decision, dismissing the appeal filed by the Revenue. The Tribunal found no fault in the Commissioner's ruling on the limitation issue based on the relevant date for computing the period of limitation as per Rule 57U. The judgment highlighted the importance of adhering to statutory timelines and the interpretation of relevant provisions in tax matters.