2004 (9) TMI 115 - SC - Central Excise

CENVAT Credit - Suppression of facts - Held that - There can be no question of suppression of fact or invocation of the extended period of limitation under proviso to Section 11A. In fact it has not been so held In AMCO Batteries decision. Having regard to the facts and circumstances and in addition to the appellant therein being entitled to get the benefit of Modvat scheme there was no justifiable reason for the appellant to suppress any fact - Tribunal has not examined any other consideration except the availability of the Modvat credit to the appellant - Matter remitted back - Decided in favour of Revenue.

Summary

Issues:
1. Duty demand and penalty imposition by Commissioner of Central Excise.
2. Tribunal's decision based on Modvat credit availability.
3. Interpretation of AMCO Batteries decision.
4. Consideration of extended period of limitation despite Modvat credit availability.
5. Tribunal's failure to consider other factors.
6. Remittal of appeal for fresh decision by Tribunal.

Analysis:
1. The judgment dealt with the duty demand of over Rs. 34 lakhs and a penalty of Rs. 5 lakhs imposed by the Commissioner of Central Excise for the period between January 1987 to August 1988. The respondent was called upon to show cause regarding the duty demand and penalty under the Central Excise Act, 1944.

2. The Customs, Excise and Gold (Control) Appellate Tribunal set aside the Commissioner's order, citing the availability of Modvat credit to the respondent-assessee as the reason for concluding that there was no intention to evade duty payment. The Tribunal's decision was challenged, leading to a reference to a larger bench.

3. Upon examining the AMCO Batteries decision, the Supreme Court clarified that the judgment did not categorically state that Modvat credit availability precludes the invocation of the extended period of limitation under the proviso to Section 11A. The context and specific facts of each case must be considered.

4. The Court emphasized that Modvat credit availability is not the sole determining factor for the extended period of limitation. Various circumstances may warrant the application of the extended period, and the weight given to Modvat credit availability depends on the case's specifics.

5. Criticizing the Tribunal for solely relying on Modvat credit availability without considering other relevant factors, the Court set aside the Tribunal's decision and remitted the appeal for a fresh decision. Both the assessee and the Department were given the opportunity to present their arguments regarding the extended period of limitation.

6. The appeal was allowed in terms of setting aside the Tribunal's decision and directing a fresh consideration by the Tribunal, ensuring a comprehensive evaluation of all relevant factors in accordance with the law.