2019 (5) TMI 1403 - AT - Central Excise

CENVAT Credit - duty paying documents - time limitation - Credit taken on input services during the months of November 2014 and December 2014 of an amount of ₹ 21,29,851/- beyond the period of six months from the date of issue of invoices - HELD THAT - The allegation in the show cause notice with respect to invocation of extended period of limitation is that the assessee has suppressed the fact that they have availed CENVAT Credit on the invoices in contravention to Rule 9(1) of CCR 2004 on the department inasmuch as they did not indicate so in their ER.1 returns. They have also not provided copies of the invoices along with returns. Thus, there was a suppression of fact and extended period of limitation is invoked. It is a well settled principle that to allege suppression, it must be shown that something which has to be disclosed by the assessee has not been disclosed. In this case, there is no requirement in the E.R 1 returns to give invoice wise details of CENVAT Credit availed. There is also no requirement of providing copies of invoices along with E.R 1 returns. Therefore, it cannot be held that the appellant had suppressed the facts from the department - Violation of rule 9(1) is established but there is no evidence of intent to evade. Therefore, the extended period of limitation cannot be invoked. There is no doubt that there was contravention of Rule 9(1) as it stood during the period but apart from the allegation that there was an intent, there is nothing in the entire show cause notice to show for support of this allegation of malafide intention. Therefore, in the show cause notice itself, I find that there is no ground to invoke the extended period of limitation. Imposition of penalty - HELD THAT - Since the element necessary for invoking the extended period of limitation was absent in the show cause notice itself, no penalty can be imposed upon the appellant. Appeal dismissed - decided against appellant.

Summary

Issues:
1. CENVAT Credit availed beyond the permissible period.
2. Imposition of penalty under Rule 15(2) of CCR 2004.
3. Invocation of extended period of limitation.
4. Allegation of suppression of facts by the assessee.
5. Dispute regarding imposition of penalty based on extended period of limitation.

Analysis:
1. The respondent, a Central Excise registrant, availed CENVAT Credit on input services beyond the stipulated period of six months from the date of issue of invoices. The demand to recover the amount along with interest and penalty was made by the original authority after a show cause notice was issued. The respondent reversed the CENVAT amount in their account and reflected it in their returns. The original authority confirmed the demand without interest but imposed a penalty under Rule 15(2) of CCR 2004.

2. The first appellate authority upheld the demand but set aside the penalty. The Revenue appealed, contending that once fraud is established, the mandatory penalty must be imposed. The Revenue argued that the extended period of limitation was applicable, and the penalty should not have been waived. The appellate tribunal analyzed the arguments and records of the case.

3. The show cause notice alleged that the assessee suppressed facts by not intimating the department about utilizing CENVAT Credit, leading to the invocation of the extended period of limitation. However, the tribunal found that there was no requirement to disclose invoice-wise details of CENVAT Credit in the returns. The tribunal noted that while there was a contravention of Rule 9(1) of CCR 2004, there was no evidence of intent to evade tax. As a result, the extended period of limitation could not be invoked.

4. The tribunal emphasized that the show cause notice did not provide grounds to invoke the extended period of limitation. The respondent did not contest the demand or penalty, and no appeal was filed against the first appellate authority's decision. The tribunal concluded that there were no elements to support the extended period of limitation, and since the necessary element was absent in the show cause notice, no penalty could be imposed.

5. Consequently, the tribunal upheld the impugned order, rejecting the appeal. The judgment clarified that the demand was time-barred, and no penalty could be imposed due to the absence of grounds for invoking the extended period of limitation.