2017 (1) TMI 794 - AT - Central Excise

Denial of CENVAT credit - Time Bar - the amount of SAD was deposited by way of cash, whether the assessee were eligible to utilize the credit balance in the DFCE Scrip for the subsequent imports? - Held that - the payment of the duties of customs was paid by way of debit in DFCE account and the B/E were duly assessed and no objection was ever raised by the customs authorities. The same is allowable as per Circular dated 05/04/2006 and Clarification 19/12/2006 - the impugned order denying the Cenvat credit to appellant is incorrect and is liable to be set aside, specially when the duty was paid by debit in DFCE account of the Bill of Entry. The department has raised no objection so there is no case of suppression of the facts on the part of the appellant. When it is so then we find no merit in the impugned order and the same is hereby set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against Order-in-Original No. 21/Commissioner/Noida/2008 dated 13/06/2008
- Availment of Cenvat Credit on duty paid on inputs
- Import under export promotion schemes
- Time-barred demand for the period prior to 31/12/2006
- Use of DFCE Account for payment
- Willful suppression by the appellant

Analysis:

The appeal was filed by M/s Good Luck Steel Tubes Ltd. against Order-in-Original No. 21/Commissioner/Noida/2008 dated 13/06/2008 passed by the Commissioner, Central Excise, Noida for the period from 04/05/2006 to 10/08/2006. The appellant is engaged in manufacturing various steel products and avails Cenvat Credit on duty paid on inputs procured both from imports and indigenous suppliers. They also import inputs under export promotion schemes like DEPB, Target plus, and DFCE. The appellant's regular import activities and sufficient input quantity over the period indicate no wrongful availment of credit.

The show cause notice issued to the appellant on 01/01/2008 was time-barred for the period prior to 31/12/2006. The appellant had other options to utilize the DFCE Scrip, making their involvement in alleged wrong credit availment unnecessary. The appellant challenged the order, citing cases like International Tobacco Co. Ltd. and Tecumesh Products India Pvt. Ltd., emphasizing the absence of willful suppression on their part.

Upon hearing both parties, it was noted that the use of the DFCE Account for payment was clarified by the Board, allowing rectification in case of assessment errors without suppression or misrepresentation. The payment of customs duties through the DFCE account was in compliance with Circulars dated 05/04/2006 and 19/12/2006, with no objections raised by customs authorities. The appellant's ability to pay SAD in cash and utilize the rest for other duties was lawful, and there was no willful suppression involved.

Considering the facts and circumstances, the Tribunal found the denial of Cenvat credit to the appellant incorrect. The duty payment through the DFCE account, absence of suppression, and compliance with circulars led to setting aside the impugned order. The appeal was allowed, granting consequential relief to the appellant, with no merit found in the department's contentions.