2018 (2) TMI 799 - AT - Central Excise

Extended period of limitation - CENVAT credit - stocks at the time of surrender of their licence - Held that - the appellant calculated the amount wrongly and reversed the lower amount. This very act of the appellant is amounting to mis-declaration and suppression with intention to evade duty - extended period of limitation rightly invoked - appeal dismissed - decided against appellant.

Summary

Issues:
Demand for reversal of Cenvat Credit on stocks at the time of licence surrender; Challenge of demand based on limitation period.

Analysis:
1. The appeal was filed against a demand for reversal of Cenvat Credit on stocks at the time of licence surrender. The appellant, a manufacturer of manmade fabrics, availed Cenvat Credit on duty paid inputs, specifically Polyester Texturised Yarn. The appellant surrendered their Central Excise registration certificate in July 2006 without correctly calculating the duty required to be paid/reversed on the remaining quantity of yarn in stock. The demand for reversal of credit was confirmed by lower authorities, leading to the appeal before the Tribunal.

2. The appellant argued that the Revenue was aware of the quantity of raw materials in stock at the time of surrender, as it was declared in their returns. They contended that the demand based on limitation was unjustified due to the Revenue's knowledge of the stock quantity. However, the Revenue maintained that the appellant delayed the matter by not voluntarily declaring and reversing the credit on the stock quantity, which constituted a mis-declaration.

3. The Tribunal noted that the appellant did not dispute the quantity of credit to be reversed at the time of surrender in 2006. Instead, the appellant miscalculated and reversed a lower amount, which was considered a mis-declaration and suppression with intent to evade duty. Consequently, the Tribunal upheld the invocation of the extended period of limitation and dismissed the appeal.

4. The decision was pronounced in court on 28/12/2017, with the Tribunal ruling in favor of maintaining the demand for reversal of Cenvat Credit based on the stocks at the time of licence surrender, citing the appellant's mis-declaration and suppression of information as grounds for upholding the extended period of limitation.