2016 (11) TMI 346 - AT - Central Excise

Denial of CENVAT credit - limitation bar - Held that - the said issue is no more res integra but settled by Hon ble Gujarat High Court in the case of CCE, Surat Vs. Neminath Fabrics Pvt Ltd 2010 (4) TMI 631 - GUJARAT HIGH COURT where under it has been held that demand notice cannot be considered as time barred even it is issued after one year from the date of detection of the suppression of fact with intent to evade payment of duty. The appellant had admitted to have wrongly availed Cenvat Credit on input invoices/Bills of Entry without receipt of the materials. In my view, therefore, the Ld. Commissioner(Appeals) is right in rejecting the respective appeals and I do not find any reason to interfere with the same - appeals dismissed - CENVAT credit not allowed - decided against assessee.

Summary

Issues:
1. Barred by limitation - Demand of Cenvat Credit availed without receipt of materials.
2. Adjudication of demand, penalty imposition, and rejection of appeals by Commissioner (Appeals).

Issue 1 - Barred by limitation - Demand of Cenvat Credit availed without receipt of materials:
The case involved appeals against an order passed by the Commissioner (Appeals) concerning the wrongful availment of Cenvat Credit without receipt of materials. The appellant admitted to availing credit against invoices without receiving the goods. The appellant argued that the demand was time-barred as the department knew about the wrongful availment on a specific date, but the demand notice was issued after a year from that date. The Revenue argued that the issue was settled by a judgment of the Hon'ble Gujarat High Court. The Tribunal, after reviewing the records and the arguments, upheld the decision of the Commissioner (Appeals) based on the settled legal position that the demand notice could be issued even after a year from the detection of the suppression of facts. The appeals were dismissed on this ground.

Issue 2 - Adjudication of demand, penalty imposition, and rejection of appeals by Commissioner (Appeals):
The appellant, in a written submission, requested the Tribunal to decide the appeals accordingly. The appellant had admitted the wrongful availment of Cenvat Credit and paid the demanded amount. The Adjudicating Authority confirmed the demand and imposed a penalty equal to the amount demanded. The Commissioner (Appeals) upheld the Adjudicating Authority's order and rejected the appeals. The Tribunal found no reason to interfere with the decision of the Commissioner (Appeals) as the appellant had admitted to the wrongful availment of Cenvat Credit. Therefore, the appeals against the adjudication of demand and penalty imposition were dismissed by the Tribunal.

This judgment highlights the importance of timely issuance of demand notices even if the wrongful act is detected after a considerable period. It also emphasizes the consequences of wrongful availment of Cenvat Credit without receipt of materials, leading to the confirmation of demands and imposition of penalties as per the Central Excise Rules, 2002.