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2018 (6) TMI 1139 - AT - Central ExciseAvailment of Excess CENVAT credit - SCN was issued to the appellant proposing to recover the excess CENVAT credit availed along with interest by invoking the extended period of limitation - Held that - In the SCN there are no specific allegations of violation of the Act and Rules and the entire show-cause notice is based on the audit report without verifying all the documents which the appellant claims to have in its possession - the appellant has claimed that they have all the documents / invoices in their possession on basis of which, the appellant has taken cenvat credit and they are ready to show the documents to the Department if the case is remanded back to the original authority. This case needs to be remanded back to the original authority because the documents which are in possession of the appellant have not been considered by both the authorities - appeal allowed by way of remand.
Issues:
1. Alleged excess CENVAT credit availed by the appellant. 2. Discrepancies in assessable value and duty paid. 3. Validity of show-cause notice and audit report. 4. Allegations of contravention of Central Excise Act and Rules. 5. Justification of extended period and penalties. 6. Negligence of the appellant in responding to audit observations. 7. Verification of documents and canceled invoice by the Department. Analysis: 1. The case involved an appeal against an order upholding the demand for excess CENVAT credit availed by the appellant, based on discrepancies in purchase amounts between CENVAT Credit Register and Trial Balance. The audit report highlighted the alleged excess credit availed during 2012-13 and 2013-14. Additionally, discrepancies in assessable value and duty paid were noted, leading to a show-cause notice proposing recovery and penalties under the Central Excise Act. 2. The appellant challenged the validity of the show-cause notice, arguing it was solely based on the audit report without considering statutory documents like Profit & Loss Account or Balance Sheet. The appellant contended that the audit report was incomplete and not legally sound. Citing relevant case law, the appellant asserted that the notice lacked specific allegations of Act and Rule violations, questioning the basis for the demand of excess CENVAT credit. 3. The appellant further argued that the discrepancies in purchase amounts were due to the treatment of stock transfers from internal units, not reflected in the Trial Balance but recorded in the Excise Register. The appellant claimed to possess invoices supporting the availed credit and challenged the imposition of penalties, citing lack of suppression and full disclosure of records to the auditor. 4. The Department defended the order, alleging the appellant's negligence in addressing audit observations and maintaining accurate records. However, the Tribunal found merit in the appellant's contentions, noting the lack of specific allegations in the show-cause notice and the need to verify the documents and canceled invoice claimed by the appellant. Consequently, the case was remanded to the original authority for further examination and verification of the appellant's documents and machinery. 5. The Tribunal emphasized the importance of considering all relevant documents and verifying the appellant's claims before reaching a final decision. The remand was deemed necessary to ensure a comprehensive review of the case, especially regarding the canceled invoice and the disputed CENVAT credit. The decision to remand the case back to the original authority was based on the need for a more thorough examination of the evidence presented by the appellant. In conclusion, the judgment highlighted the significance of due process, proper verification of documents, and adherence to legal provisions in matters concerning CENVAT credit and Central Excise duty. The remand order aimed to facilitate a more informed and fair adjudication of the issues raised by the appellant, ensuring a just resolution based on a comprehensive review of all relevant facts and documents.
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