2007 (9) TMI 111 - AT - Central Excise

Credit availed without giving duty paying documents along with RT 12 Return If Revenue kept silent for 4 to 6 years for the same SCN cannot be issued after 6 years Demand is time-barred

Summary

Issues involved:
1. Correct availing of modvat credit based on duty paying documents
2. Allegations of suppression of facts and intentional availing of inadmissible credit
3. Failure to submit relevant invoices before the Audit Party
4. Non-attendance of personal hearing by the assessee

Analysis:

Issue 1: Correct availing of modvat credit based on duty paying documents
The Appellate Tribunal reviewed the case records to determine if the appellants correctly availed modvat credit based on duty paying documents for the disputed periods of December 1997, January 1999, and December 1999. The Tribunal found that the monthly returns were timely submitted along with modvatable invoices, which were duly scrutinized by jurisdictional Range Officers. The relevant duty paying invoices were verified and defaced, indicating proper compliance with modvat rules. The Audit Party raised objections in November 2000, but the appellants subsequently submitted the duty payment documents, including the invoices in question, to the Range Office. The Tribunal referenced previous judgments to conclude that the credit was availed under valid duty payment documents, rendering the demand and penalty unsustainable. The Tribunal also noted that the plea of limitation was valid as the extended period was not permissible due to timely filing of monthly returns and lack of allegations regarding suppression of facts or fraud.

Issue 2: Allegations of suppression of facts and intentional availing of inadmissible credit
The Revenue alleged that the assessee knowingly and intentionally availed inadmissible credit in contravention of Rule 57-C of the Central Excise Rules, 1944. The Revenue contended that the assessee did not submit relevant invoices before the Audit Party despite multiple opportunities and that there was suppression with intent to evade payment of duty. However, the Tribunal found no evidence to support these allegations and rejected the Revenue's appeal, upholding the Commissioner (Appeals)'s decision that there was no suppression of facts and the demand was barred by limitation.

Issue 3: Failure to submit relevant invoices before the Audit Party
The Revenue's allegation was that the respondent availed credit during 1997-1999 without presenting duty paying documents upon demand. However, the Tribunal observed that there was no allegation of non-annexation of duty paying documents to the Return for availing credit. The Tribunal questioned why the Revenue remained silent for 4 to 6 years before issuing the show cause notice in 2003. The Tribunal agreed with the Commissioner (Appeals) that the demand was barred by limitation due to the delayed issuance of the notice, rejecting the Revenue's appeal for lacking merit.

Issue 4: Non-attendance of personal hearing by the assessee
The Revenue raised concerns about the assessee's non-attendance at the personal hearings granted four times and failure to submit invoices under which they availed Cenvat Credit before the Central Excise Officer. However, the Tribunal did not find these grounds sufficient to overturn the Commissioner (Appeals)'s decision and rejected the Revenue's appeal.

In conclusion, the Appellate Tribunal upheld the Commissioner (Appeals)'s decision, ruling in favor of the appellants on the grounds of correct availing of modvat credit, lack of suppression of facts, the demand being time-barred, and unwarranted imposition of penalty.