2019 (3) TMI 945 - AT - Central Excise

CENVAT Credit - duty paying documents - credit availed on supplementary invoices issued by IOCL, Trombay, Mumbai with reference to the original invoices on which the credit was already availed - case of the department is that, there is no provision in Cenvat Credit Rules to issue supplementary invoices in respect of inputs cleared as such - Time Limitation - Held that - The appellant initially availed the credit on the original invoices and the supplementary invoices, corresponding to the said original invoices on which the credit was taken, were issued by their own another unit. There is no dispute about the payment of duty on which the Cenvat credit was taken. It is also a fact that appellant is a public sector undertaking therefore, there is no question of malafide intention to evade payment of duty and wrong availment of credit. Accordingly, extended period of limitation cannot be invoked as provided under Section 11A of Central Excise Act, 1944. Accordingly, the demand is clearly time-barred, and is set aside. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Entitlement to Cenvat credit on supplementary invoices under Cenvat Credit Rules.
2. Time-barred demand for the period January 2012 to July 2012.
3. Invocation of extended period due to intention to evade payment of duty.
4. Penalty imposed on executives of the Company.

Entitlement to Cenvat Credit on Supplementary Invoices:
The main issue in this case was whether the appellant was entitled to Cenvat credit on supplementary invoices issued by IOCL, Trombay, Mumbai, concerning original invoices on which the credit was already availed. The department contended that there was no provision in the Cenvat Credit Rules for issuing supplementary invoices for inputs cleared as such, thus denying the admissibility of credit on such invoices. The appellant argued that the supplementary invoices were only for the differential amount of inputs, and since credit had already been availed on the original clearance of inputs without any dispute, there was no reason to deny credit on the supplementary invoices. The appellant relied on various judgments to support their case.

Time-barred Demand:
The appellant contended that the demand for the period January 2012 to July 2012 was time-barred since the show cause notice was issued on 10.01.2014, which exceeded the normal period of one year. They argued that the Cenvat credit on supplementary invoices was declared in their returns, and the credit was taken on invoices issued by their own unit of the same Company. Thus, there was no suppression of facts, and the demand should be considered time-barred. The appellant cited several judgments to support their argument.

Invocation of Extended Period:
Additionally, the appellant, being a government undertaking, argued that there was no intention to evade payment of duty, and therefore, the extended period should not be invoked. They relied on judgments to support their claim that the extended period of limitation could not be invoked under Section 11A of the Central Excise Act, 1944, due to their status as a public sector undertaking and the absence of malafide intention to evade duty payment.

Penalty Imposed on Executives:
Finally, penalties were imposed on two executives of the Company. However, since the demand itself was found to be time-barred and not sustained, the penalties on the executives were deemed consequential to the demand of duty and, therefore, not sustainable. Consequently, the appeals of the executives were also allowed.

In conclusion, the appellate tribunal ruled in favor of the appellant, setting aside the demand as time-barred and allowing the appeal. The penalties imposed on the executives were also lifted due to the non-sustainability of the demand. The judgment highlighted the importance of adherence to statutory timelines, the absence of malafide intentions, and the implications of penalties in cases where the demand itself is not upheld.

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