2018 (4) TMI 1760 - AT - Central Excise

CENVAT Credit - credit availed within six months from the date of issue of invoice - spare parts of capital goods in the year in which the goods had been received - N/N. 21/2014-CE(NT) dated 11th July 2014 and subsequent N/N. 6/2005-CE(NT) dated 1st March 2015 - HELD THAT - It is seen from the records that there is no evidence of suppression or mis-representation on the part of the appellant and that a major portion of the demand had already been set aside on the finding that availment was covered by the eligible notification and, therefore, the portion that was confirmed could not have said to have arisen on account of suppression or mis-representation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge to disallowance of CENVAT credit, imposition of penalty under section 11AC of Central Excise Act, 1944.

Analysis:
The appellant contested the disallowance of CENVAT credit amounting to ?5,41,329 while only allowing credit of ?40,393 due to not being availed within six months from the date of invoice. Additionally, a penalty of ?5,44,446 was imposed under section 11AC of the Central Excise Act, 1944. The appellant also challenged the disallowance of CENVAT credit of ?3,117 on spare parts of capital goods and the subsequent penalty. The Tribunal referred to a previous decision where it was held that a notification prescribed a one-year time period for taking credit, and the appellant was entitled to the credit. The CENVAT credit in question pertained to a specific period, and it was argued that the normal period of limitation could not be invoked for the credit availed during that time. The Tribunal found no evidence of suppression or misrepresentation by the appellant, and a significant portion of the demand was set aside. Citing relevant case laws, it was established that when facts are fully disclosed and there is no suppression, the extended period of limitation is not applicable. Following this precedent, the impugned order disallowing the CENVAT credit and imposing a penalty was set aside, and the appeal was allowed.

Conclusion:
The Tribunal ruled in favor of the appellant, setting aside the disallowance of CENVAT credit and the penalty imposed under section 11AC of the Central Excise Act, 1944. The decision was based on the absence of suppression or misrepresentation by the appellant and the application of relevant case laws establishing that the extended period of limitation is not applicable when facts are fully disclosed.