2017 (8) TMI 1166 - AT - Central Excise

MODVAT/CENVAT credit - 0.40 mm, 0.50 mm and 0.63 mm coils - extended period of limitation - Held that - though assessee had shown to the department that they were only using non-modvat products inputs for manufacture of exempted items, in reality, they had used the said modvatted inputs only hence misstated vital facts to the department. We find that these revelations were detected only from private records of assessee and it had come to light only after investigation undertaken by the officers. In the circumstances, while the figures may well have been taken by the departmental officers from records and balance sheet etc. nonetheless, the fact remains that these were not intimated voluntarily by assessee as they were required to, but had to be ferreted out in investigation. There not being any clandestine removal is not a yardstick for determining invocation of extended period of limitation - As correctly found by the adjudicating authority it is obvious that the facts leading to reversal of credit and payment of duty on the dies were not disclosed to the department and were found out only after in depth investigation and verification of private records and therefore there was suppression of relevant information , is a correct finding. We do not find any infirmity in the same - appeal dismissed in toto.

Summary

Issues Involved:
1. Reversal of credit for stainless steel (SS) coils.
2. Demand of duty on tools and dies.
3. Penalizing the appellant twice under the MODVAT scheme.
4. Exemption Notification No.67/95 and its retrospective application.
5. Extended period of limitation for demand confirmation.

Detailed Analysis:

1. Reversal of Credit for Stainless Steel (SS) Coils:
The appellant used 0.40 mm, 0.50 mm, and 0.63 mm SS coils in the manufacture of both dutiable and exempted products. The department found that these coils were used in exempted products like cookware and restaurant items. The adjudicating authority, after detailed analysis, concluded that out of the total demand of ?11,61,312/-, ?3,59,668/- was justified as credit for dutiable goods, reducing the demand to ?8,01,644/-. The Tribunal upheld this decision, stating that the appellant failed to disprove the ineligibility of the remaining amount or provide evidence against the use of inputs in exempted products.

2. Demand of Duty on Tools and Dies:
The appellant developed various moulds/dies valued at ?480.70 lakhs during 1.4.1994 to 31.3.1995, with a portion used for exempted products. The adjudicating authority found that no exemption was available for dies used between 1.3.1994 and 15.3.1995. The original demand of ?51,09,014/- was reduced to ?11,17,500/- based on evidence provided by the appellant. The Tribunal confirmed this reduced demand, agreeing with the detailed analysis and evidence considered by the lower authority.

3. Penalizing the Appellant Twice Under the MODVAT Scheme:
The appellant argued that they were penalized twice as credit for inputs used in dutiable products was not taken, and credit for inputs used in export goods was disallowed. The Tribunal clarified that credit is only allowed when final products are dutiable. For exempted goods, even if exported, input credit is not permissible, aligning with the adjudicating authority's reasoning. The Tribunal found no grounds to interfere with the lower authority's decision to order the reversal of ?8,01,644/-.

4. Exemption Notification No.67/95 and Its Retrospective Application:
The appellant claimed that Exemption Notification No.67/95, dated 16.03.1997, should be applied retrospectively. The Tribunal rejected this argument, stating that the notification was effective from 16.03.1995 and had no retrospective application. The Tribunal found no merit in the appellant's plea for retrospective exemption.

5. Extended Period of Limitation for Demand Confirmation:
The appellant contended that the extended period of limitation was wrongly invoked, as there was no clandestine removal and all facts were available in statutory documents. The Tribunal noted that the department discovered the misdeclaration and use of modvat inputs in exempted products only after investigation. The adjudicating authority correctly found suppression of facts, justifying the extended period of limitation. The Tribunal upheld this finding, emphasizing that the extended period applies in cases of suppression, misstatement, or fraud with intent to evade duty.

Conclusion:
After thorough analysis, the Tribunal dismissed the appeal in toto, finding no merit in the appellant's legal pleas. The adjudicating authority's decisions on credit reversal, duty demands, and extended limitation were upheld, confirming the correctness of the findings and calculations.