2018 (9) TMI 1055 - AT - Central Excise

Time Limitation - CENVAT credit - duty paying invoices - appellants have availed credit in respect of invoices which have been issued to their previous premises at Pattullous Road, Chennai - Held that - There is no positive act of suppression unearthed by the Department so as to saddle the appellant with the intention to evade payment of duty by suppression of facts. The credit availed was disclosed in the accounts as well as the ER1 returns filed by them - extended period cannot be invoked - appeal allowed on ground of limitation.

Summary

Issues:
Availment of Cenvat Credit on input services for the period of premises shifting.

Analysis:
The case involved the appellant, a manufacturer of motor vehicle parts, who shifted their factory premises from one location to another. During the shifting period, they availed Cenvat Credit on input services related to their previous premises. The Department contended that the credit availed during the shifting period was not eligible as the services were addressed to the old premises. A Show Cause Notice was issued, proposing recovery of the allegedly ineligible credit, along with interest and penalties. The adjudicating authority confirmed the recovery, and the Commissioner (Appeals) upheld the decision, leading to the appeal before the Tribunal.

The appellant argued that as per Rule 10 of the Cenvat Credit Rules, they would be eligible for credit if the credit was availed at the old premises and then transferred to the new premises. They highlighted that the shifting process was ongoing, and some services were still being utilized at the old premises due to incomplete shifting. The appellant emphasized the ground of limitation, stating that there was no evidence of suppression of facts and that the Show Cause Notice was issued after more than four years.

On the other hand, the Department contended that post the factory's shift to the new premises, availing services at the old premises was not permissible. They argued that services like renting of immovable property services, etc., pertaining to the old premises were not eligible for credit once the new premises were registered.

After hearing both sides, the Tribunal noted that during the disputed period, the shifting of premises was ongoing, and the appellant was still utilizing the old premises for limited purposes. The Tribunal found no evidence of suppression of facts by the appellant and observed that the credit availed was disclosed in their accounts and returns. Consequently, the Tribunal held that the extended period invoked by the Department lacked factual or legal basis, and the demand could not be sustained. Therefore, the impugned order was set aside on the ground of limitation, and the appeal was allowed with consequential reliefs, if any.