2016 (9) TMI 368 - AT - Central Excise

Invokation of extended period of limitation - Cenvat credit - availed on the amount of excise duty paid in purchase of steel bars, angles, MS Plates and Coils - used in fabrication of capital goods such as machinery, Anneal Lehr & cutting line etc. - period of dispute is from April 2009 to December 2009 - Held that - the issue for the period prior to 07.07.2009 is in appellant s favour in as much as the Gujarat High Court in the case of M/s. Mundra Ports & Special Economic Zone Ltd. Vs. C.C.E. & Cus 2015 (5) TMI 663 - GUJARAT HIGH COURT . In the order in Original and in the appellate order, it had been noted that the facts came to light only upon the visit of the internal audit party to their factory. This very fact would go to show that the records were maintained and there has been no suppression of facts coupled with an intention to evade payment of duty and therefore the invocation of longer period fails. Therefore, the appeal is allowed on merits upto 07.07.2009 and fully on limitation. - Decided partly in favour of appellant

Summary

Issues: Availment of Cenvat Credit on excise duty paid for steel items used in fabrication of capital goods, invocation of extended period for demand of Cenvat Credit, conflicting views on eligibility of Cenvat Credit, suppression of facts and intention to evade duty.

Analysis:

1. The case involved the question of whether Cenvat Credit could be claimed on excise duty paid for steel items like bars, angles, MS Plates, and Coils used in the fabrication of capital goods. The dispute covered the period from April 2009 to December 2009. The appellant cited favorable judgments prior to July 2009, including the Gujarat High Court's decision in the case of M/s. Mundra Ports & Special Economic Zone Ltd. The jurisdictional High Court also supported the eligibility of Cenvat Credit for certain steel items. However, for the period from July 2009 to December 2009, there was a contention between the appellants and the Revenue regarding the eligibility of the disputed items for credit.

2. The advocates for the appellants argued that the demand for denial of Cenvat Credit was based on the invocation of the extended period. They contended that the issue was interpretative and not suppressive in nature, making the invocation of the extended period unsustainable. Despite the possibility of remanding the matter for verification, the advocates emphasized that conflicting views existed on the eligibility of Cenvat Credit during the relevant period. They referred to the consistent view of the Supreme Court that conflicting views negate the invocation of the extended period, citing the case of M/s. Jaiprakash Industries Ltd Vs. Commissioner of C.Ex., Chandigarh.

3. The order highlighted that the facts leading to the discovery of the alleged suppression only emerged during an internal audit visit to the factory. This indicated that proper records were maintained, and there was no deliberate suppression of facts or intention to evade duty. Consequently, the appeal was allowed on merits up to July 2009 and fully on the grounds of limitation. The decision was based on the understanding that conflicting views on the eligibility of Cenvat Credit during the relevant period justified the allowance of the appeal and the rejection of the extended period for demand.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT CHENNAI highlighted the key issues, arguments, legal precedents, and the ultimate decision regarding the availment of Cenvat Credit and the invocation of the extended period for demand in the case.