2017 (5) TMI 810 - AT - Central Excise

Utilization of CENVAT credit - whether the appellant having availed credit of duty paid under Additional Duties of Excise (Textile & Textile Articles) Act 1978 during the period April 2003 to 09/07/2004 utilised the same for payment of duty leviable under Additional Duties of Excise (Goods of Special Importance) Act 1957? Held that - There is specific provision that the CENVAT credit availed on Additional Duties of Excise (Textile and Textile Articles) can be utilised only for the discharge of duty liability under the said Additional Duties of Excise (Textile and Textile Articles) - the utilisation of CENVAT credit availed of Additional Duties of Excise (Textile and Textile Articles) for discharge of Additional Duties of Excise (Goods of Special Importance) is incorrect and unacceptable in law. Time limitation - Held that - the adjudicating authority has not recorded any finding on the point of limitation urged by the appellant and the first appellate authority has simply brushed aside the grounds raised by the appellant - the adjudicating authority should be given an opportunity to consider the grounds of limitation in its correct perspective. The matter back to the adjudicating authority to come to a conclusion on the limited point of limitation raised by the appellant after following the principles of natural justice - appeal allowed by way of remand.

Summary

Issues Involved:
1. Utilization of CENVAT credit under different excise acts
2. Consideration of limitation in show cause notice

Analysis:
1. Utilization of CENVAT credit under different excise acts:
The appeal revolved around the utilization of CENVAT credit of duty paid under the Additional Duties of Excise (Textile & Textile Articles) Act, 1978 for the payment of duty leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The Revenue contended that such utilization was not in accordance with the law. The lower authorities ruled against the appellant on the merits of the case. The Tribunal found that utilizing the CENVAT credit for discharging duty under a different excise act was incorrect and unacceptable in law. The Tribunal highlighted the specific provision that CENVAT credit availed under one category could only be used for the discharge of duty liability under the same category. Therefore, the appellant's utilization of the credit was deemed unlawful.

2. Consideration of limitation in show cause notice:
The appellant raised a point regarding the limitation period, arguing that the show cause notice issued was beyond the statutory limitation period. The CENVAT credit was availed between 2003 and 2004, while the notice was dated 2008. The Tribunal noted that neither the adjudicating authority nor the first appellate authority had adequately addressed this limitation issue. The adjudicating authority failed to provide a finding on the limitation point, and the first appellate authority did not consider the appellant's grounds seriously. The Tribunal held that the adjudicating authority should revisit the limitation aspect and consider it properly. Consequently, the Tribunal disposed of the appeal on the merits against the appellant but remanded the matter back to the adjudicating authority to reevaluate the limitation issue in accordance with the principles of natural justice.

In conclusion, the Tribunal upheld the decision against the appellant on the merits regarding the incorrect utilization of CENVAT credit. However, the issue of limitation in the show cause notice was left open for the adjudicating authority to reexamine. The judgment emphasized the importance of adhering to the specific provisions governing the utilization of CENVAT credit under different excise acts and the need for a thorough consideration of limitation issues in such cases.