2018 (3) TMI 822 - AT - Central Excise

CENVAT credit - job-worker - credit on the strength of ISD invoices issued by the principal supplier of input - Held that - on the identical facts in the case of Ruby Confectionery Pvt. Ltd. 2016 (9) TMI 781 - CESTAT HYDERABAD the demand has been dropped on limitation. Since the fact in the present case also absolutely identical. The demand is not sustainable on time bar therefore the impugned order is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether the appellant, a job worker, is entitled to cenvat credit based on ISD invoices issued by the principal supplier.

Analysis:

1. Entitlement to Cenvat Credit:
The appellant, represented by Ms. Mansi Patil, acknowledged that the issue on merits is against them. However, they argued for a strong case on limitation. They pointed out that they had filed an authorization with the Jurisdictional Deputy Commissioner, stating their intention to avail cenvat credit on various items. The appellant argued that since this authorization was submitted to the department, there was no suppression of facts. They relied on a previous Tribunal decision involving similar facts where the demand was dropped on limitation grounds.

2. Revenue's Position:
On the other hand, Shri Deepak Chavan, representing the Revenue, reiterated the findings of the impugned order. He contended that although the appellant had filed an authorization, it did not specifically mention availing credit on ISD invoices. Therefore, he argued that there was a suppression of fact justifying the demand for the longer period.

3. Tribunal's Decision:
After considering the arguments from both sides, the Tribunal referred to a previous judgment involving identical facts. In that case, the demand was dropped on limitation grounds as the appellant, also a job worker of the same principal supplier, had availed credit on ISD invoices. The Tribunal quoted the previous judgment to emphasize that there was no willful suppression of facts to evade duty payment. Based on this precedent, the Tribunal found the present case to be absolutely identical and ruled in favor of the appellant. The impugned order was set aside, and the appeal was allowed on limitation grounds.

In conclusion, the Tribunal's decision was based on the principle that there was no suppression of facts by the appellant, and the demand for the longer period was not sustainable on time bar grounds. The judgment highlighted the importance of disclosing intention to avail cenvat credit and emphasized that such disclosure to the department could impact the limitation period for raising demands.