2018 (9) TMI 3 - AT - Central Excise

Recovery of CENVAT Credit - time limitation - Appellant contests the confirmation of recovery on the ground that demand was entirely beyond the period of limitation permissible under section 11A of Central Excise Act, 1944 - Held that - The recovery for period beyond five years of ineligible credit amounting to ₹ 6,499/- is set aside as also interest for the period beyond five years. Demand within the extended period of limitation - Held that - the claim of the Learned Counsel that the extended period is not invokable does not sustain - the interest calculation should be re-worked accordingly. Appeal disposed off.

Summary

Issues: Recovery of wrongly availed CENVAT credit, imposition of penalty, limitation period for recovery, interest calculation.

Analysis:

1. Recovery of wrongly availed CENVAT credit: The appellant, M/s VVF Ltd, appealed against the order-in-appeal by the Commissioner of Central Excise (Appeals), Mumbai Zone – II. The audit report highlighted various credits availed by the appellant in the CENVAT account from April 2005 to March 2011, which were denied on multiple grounds. The appellant had reversed the entire credit under dispute during the audit. A show cause notice was issued for the recovery of the wrongly availed credit and interest, along with the imposition of a penalty. The appellant contested the recovery of a certain amount beyond the period of limitation as per Section 11A of the Central Excise Act, 1944, and also challenged the interest calculation.

2. Imposition of penalty: The lower authorities upheld the liability under rule 14 of CENVAT Credit Rules, 2004, while setting aside the penalty due to compliance with obligations. The Authorized Representative opposed the plea that limitation would apply to the demand, citing findings on suppression and misrepresentation. The appellant contested the recovery of a specific amount and interest, arguing that the extended period should not be invoked. However, the recovery for the period beyond five years and interest for the same period were set aside.

3. Limitation period for recovery: The appellant argued that certain demands were beyond the period of limitation, while the first appellate authority relied on judicial decisions to support the recovery within the extended period. The appellant's claim that the extended period should not be invoked was not sustained, leading to a reworking of the interest calculation based on the findings and relevant legal precedents.

4. Interest calculation: The Tribunal considered various judicial decisions, including those from the Hon’ble High Courts of Gujarat and Chhattisgarh, to determine the interest calculation. The interest calculation was to be re-worked based on the findings and legal precedents cited. The appeal was disposed of accordingly, with the decision dictated in court by the Member (Technical) of the Appellate Tribunal CESTAT Mumbai.