2016 (12) TMI 589 - AT - Central Excise

Invocation of extended period of limitation - suppression of facts - procurement of inputs from 100% EOU - Held that - I hold that the appellant had made appropriate disclosures in the returns filed with the Revenue and as such, no case of suppression or contumacious conduct is made out against the appellant. Accordingly, I hold that the extended period of limitation is not attracted. Accordingly, I set aside the demand and penalty retained by the Commissioner (Appeals). So far the Commissioner (Appeals) has deleted the demand and penalty to that extent, there is no interference by this Tribunal. Thus, the appeal is allowed with consequential benefits - decided in favor of assessee.

Summary

Issues:
Cross-appeals by assessee and Revenue regarding extended period of limitation for Cenvat credit on excisable goods procured from a 100% EOU.

Analysis:
1. Revenue's Appeal Withdrawal:
- Revenue withdrew Ex.Appeal No.E/53400/2014-SMB under the litigation policy without delving into merits.

2. Assessee's Appeal - Extended Period of Limitation:
- Assessee, a manufacturer of self-adhesive tapes, procured inputs from a 100% EOU, leading to excess Cenvat credit.
- Revenue alleged inadmissible Cenvat credit totaling &8377; 10,90,087/-, proposing recovery under Rule 15 of CCR.

3. Assessee's Contention:
- Assessee contested the show cause notice on merits and limitation, arguing admissibility under Rule 3 of CCR.

4. Adjudication and Appeal:
- Additional Commissioner confirmed the demand and imposed a penalty of &8377; 10,90,087/-.
- Commissioner (Appeals) partially allowed the appeal, reducing the demand to &8377; 1,29,728/- but retained the penalty.

5. Commissioner's Observations:
- Commissioner upheld the demand and penalty, citing non-contestation by the appellant.
- Extended limitation period invoked due to suppression of facts by the appellant.

6. Tribunal Decision:
- Assessee appealed to the Tribunal, arguing no elements for extended limitation were found.
- Tribunal held that no suppression or contumacious conduct was evident, setting aside the demand and penalty.

7. Final Verdict:
- Tribunal allowed the assessee's appeal, dismissing the Revenue's appeal as withdrawn.

In conclusion, the Tribunal ruled in favor of the assessee, highlighting the lack of suppression or contumacious conduct, leading to the dismissal of the demand and penalty. The appeal process showcased the importance of proper disclosure and the absence of fraudulent intent in tax matters involving Cenvat credit on excisable goods procured from a 100% EOU.