2017 (7) TMI 796 - HC - Central Excise

CENVAT credit - time limitation - Section 11A of the Act - whether the Tribunal has rightly allowed the appeal on the ground of limitation, taking into account Section 11A of the Act? - Held that - A similar question was considered by Hon ble Supreme Court in the case of Cosmic Dye Chemical Vs. Collector of Central Excise, Bombay 1994 (9) TMI 86 - SUPREME COURT OF INDIA , where it was held that the allegation of willful suppression with intent to evade was not established, the Tribunal was justified in allowing the appeal. In the present case the show cause notice cum demand issued by the respondent is certainly time barred - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against order of Central Excise & Service Tax Appellate Tribunal
2. Availing CENVAT Credit facility
3. Show cause notice for alleged evasion of duty
4. Appeal based on limitation under Section 11A of the Act
5. Interpretation of willful suppression with intent to evade duty
6. Time-barred show cause notice
7. Compliance with legal provisions

Analysis:
1. The appeal was filed against the order of the Central Excise & Service Tax Appellate Tribunal, New Delhi, dated 17-07-2015. The respondent industry, engaged in manufacturing various products and availing CENVAT Credit, was issued a show cause notice in 2009 for alleged duty evasion. The adjudicating authority passed an order in 2014, leading to subsequent appeals up to the High Court.

2. The Tribunal allowed the appeal primarily on the ground of limitation under Section 11A of the Act. The central issue was whether the appellant was liable to pay for electricity wheeled out and if the show cause notice was time-barred. The Tribunal found that the allegation of willful suppression with intent to evade was not established, citing various legal precedents and past proceedings on the matter.

3. Section 11A of the Act imposes a limitation of six months for duty recovery, extending to five years in cases of fraud, collusion, willful misstatement, or suppression of facts to evade duty payment. The judgment referred to a Supreme Court case emphasizing that any misstatement or suppression must be willful to constitute grounds for invoking the extended limitation period.

4. The appellant argued a bona fide belief regarding the duty exemption status of certain products, which influenced the declaration made. The High Court, following the Supreme Court precedent, held that the misstatement or suppression of facts was not willful in this case, leading to the appeal being allowed based on this interpretation.

5. The High Court concurred with the Tribunal's decision that the show cause notice cum demand was time-barred, and no substantial legal question arose for consideration. The impugned order of the Tribunal was upheld, and the appeal was dismissed, emphasizing compliance with legal provisions and the absence of any interference warranted.

6. The judgment provides a detailed analysis of the legal provisions, precedents, and factual circumstances to determine the validity of the appeal and the grounds for allowing it. The decision underscores the importance of establishing willful intent in cases of duty evasion allegations and the significance of adherence to statutory limitations in such matters.