2017 (4) TMI 550 - AT - Central Excise

CENVAT credit - extended period of limitation - demand - Held that - suppression, mis-statement, etc. cannot be leveled against the appellant, justifying invocation of the extended period of limitation for issuance of the SCN - Commissioner (Appeals) have rightly remanded to the adjudicating authority for a fresh decision considering the facts and additional evidence produced before him. In this view the matter, the impugned order upheld in appeal directing the adjudicating authority to pass a fresh order as directed - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Disallowed cenvat credit on repair and maintenance service, supply of tangible goods service, and consultancy for scientific study of fly ash dumping. Applicability of limitation period for issuance of show cause notice.

Analysis:
The case involved disallowed cenvat credit on repair and maintenance service, supply of tangible goods service, and consultancy for scientific study of fly ash dumping. The appellant, engaged in coal production for captive use in manufacturing, faced objections from Central Excise Audit Officers regarding cenvat credit availed on certain services. The audit contended that services were rendered before the imposition of Central Excise Duty on coal, and the credit was taken before obtaining the registration certificate. The matter was adjudicated, resulting in disallowance of cenvat credit and imposition of penalties. The appellant argued that the credits were availed post-registration and used for coal removal, relying on relevant case laws. The appellant also contested the objection on consultancy services related to fly ash dumping, asserting its necessity for coal production. The Department, represented by the respondent, upheld the findings of the impugned order.

During the proceedings, the appellant highlighted that the credits were reflected in filed returns and known to the Department since 2012. The appellant's activities were also acknowledged in 2007, as evidenced by a prior order. The appellant argued against invoking the extended period of limitation for the show cause notice, citing the Hon'ble Supreme Court's stance on known facts. The Supreme Court precedent emphasized confining show cause notices to the normal limitation period when facts are already known to the Department. Consequently, the Tribunal allowed the appeals solely on the ground of limitation, without delving into the case's merits.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeals based on the limitation period, without addressing the substantive issues of cenvat credit disallowance. The decision hinged on the Department's awareness of the appellant's activities since 2007 and the application of the limitation period for initiating the show cause notice, in line with the Supreme Court's directive on known facts and limitation periods.