2016 (6) TMI 1053 - AT - Central Excise

Cenvat Credit / Modvat Credit - duty paying documents - appellants availed credit of duty paid on inputs on the strength of carbon copies of challans extended period of limitation - Held that - The duty paid on the inputs is also not disputed. This apart, we have to say that when the duty paid documents are defaced by the Range Superintendant, thereby approving the documents to be correct and proper, then the department cannot later turn around and contend that the documents do not satisfy the requirements for availing credit and that appellant is guilty of suppression of facts. - The issue of limitation is answered in favor of the appellant/assessee. - Demand set aside - Decided in favor of assessee.

Summary

Issues Involved:
1. Consideration of all issues raised by the appellant, including the issue of limitation, as directed by the High Court.
2. Admissibility of MODVAT credit on documents issued by consignment agent.
3. Allegation of suppression of facts by the appellant.
4. Application of the bar of limitation in issuing the show cause notice.
5. Interpretation of the duty paid documents defaced by the Range Superintendent.
6. Decision on the time-barred demand and the appellant's liability.

Analysis:
1. The High Court directed the Tribunal to re-examine all issues raised by the appellant, including the limitation issue. The appellant, a manufacturer of MS Ingots, availed MODVAT credit based on challans issued by TISCO through a consignment agent. The department disallowed the credit and imposed a penalty, leading to multiple rounds of litigation and the matter being remanded by the High Court.

2. The appellant argued that the consignment agent's role in issuing the challans did not render the credit inadmissible, as the agent operated within TISCO's stock yard. The appellant contended that the department's objection was factually incorrect, supported by a letter from TISCO confirming the consignment agent's role in the yard.

3. Regarding the allegation of suppression of facts, the appellant highlighted that the Range Superintendent had approved the documents by defacing them, indicating the department's awareness of the consignment agent's involvement. The appellant argued that the show cause notice was time-barred, as the department should have raised objections earlier based on the defaced documents.

4. The department argued that the challans signed by the consignment agent were not valid, leading to the appellant's alleged suppression of facts. However, the Tribunal noted that the documents were filed with RT-12 returns, defaced by the Range Superintendent, and the duty paid was undisputed, rejecting the department's argument of suppression.

5. The Tribunal emphasized that once the Range Superintendent defaced the documents, approving them, the department could not later claim non-admissibility of credit or suppression of facts. Citing a previous Tribunal decision, the Tribunal held that the demand was time-barred, favoring the appellant on the issue of limitation.

6. Ultimately, the Tribunal set aside the impugned order, allowing the appeal with consequential reliefs, based on the finding that the demand was time-barred due to the department's delay in raising objections. The decision focused on the procedural aspect of limitation, without delving into the merits of the case, in line with the High Court's directive and relevant legal precedents.