2018 (1) TMI 635 - AT - Central Excise

CENVAT credit - fake invoices - availing cenvat credit without receipt of inputs and raising the credit based on only two documents - penalties - time limitation - Held that - SCN dated 31.03.2005 was issued for confiscation of the finished goods and raw materials which were found in excess. The preamble of the SCN specifically records that on the basis of intelligence collected, the factory premises of the main appellant was visited. The current SCN in the appeal in hand is also stating the very same preamble and demands the duty from the appellant for availing cenvat credit without receipt of the materials. The SCN earlier issued was decided by the Tribunal in favour of the appellant herein by setting aside the confiscation, in my view, the SCN in this appeal which has been issued on 31.08.2009 seems to be patently hit by limitation. The impugned is unsustainable on limitation and is liable to be set aside - appeal allowed.

Summary

Issues involved:
Denial of cenvat credit to the main appellant for availing credit without receipt of inputs, reliance on statements of authorized signatories and officers, time limitation on Show Cause Notice, application of Central Excise Act provisions, reliance on previous Tribunal decision, sufficiency of evidence, and setting aside the impugned order based on limitation.

Analysis of the Judgment:

1. Denial of Cenvat Credit:
The issue revolved around the denial of cenvat credit to the main appellant for availing credit without the receipt of inputs. The Revenue alleged that the main appellant had availed cenvat credit solely based on invoices from a registered dealer, leading to penalties on other appellants. The lower authorities relied on statements from authorized signatories and officers. The appellant's counsel argued that the denial was solely based on statements without corroborative evidence and that the investigation did not reveal any unaccounted material, questioning the application of the Central Excise Act provisions.

2. Time Limitation on Show Cause Notice:
The discussion also focused on the time limitation for the Show Cause Notice. The appellant contended that the current notice, issued almost four years after a previous notice, was hit by limitation. The Tribunal highlighted the importance of the limitation issue, emphasizing that the current notice seemed to be time-barred based on the previous Tribunal decision and the High Court's ruling in a similar case.

3. Reliance on Previous Tribunal Decision:
The Tribunal referred to a previous Tribunal decision that set aside the confiscation of goods, emphasizing that the current Show Cause Notice was based on the same investigation and premises visit. Drawing parallels to a High Court case, the Tribunal concluded that the current notice was unsustainable due to limitation issues, following the precedent set by the High Court's judgment.

4. Sufficiency of Evidence:
Both sides presented arguments regarding the sufficiency of evidence, with the Revenue emphasizing admissions by the main appellant's officers regarding raising credit based on documents without material receipt. The Tribunal considered these arguments but ultimately focused on the limitation aspect to set aside the impugned order, refraining from delving into other arguments due to the decisive nature of the limitation issue.

In conclusion, the judgment primarily centered on the denial of cenvat credit, time limitation on the Show Cause Notice, reliance on previous decisions, sufficiency of evidence, and the ultimate decision to set aside the order based on the limitation issue. The Tribunal's detailed analysis and application of legal principles, including precedent from higher courts, led to the allowance of the appeals solely on the grounds of limitation, showcasing a meticulous consideration of the legal aspects involved in the case.