2002 (9) TMI 483 - AT - Central Excise

Summary

Issues:
1. Recovery of irregularly availed notional credit.
2. Availability of differential higher notional credit.
3. Applicability of Board's Circular No. 48/90-CX. 8.
4. Challenge on the point of limitation.

Analysis:

1. Recovery of irregularly availed notional credit:
Two show cause notices were issued proposing recovery of irregularly availed notional credit by the appellants during specific periods. The appellants initially took notional credit on inputs from small-scale industrial units but later took differential higher notional credit when those units paid differential duty due to price revisions. The authorities held that such differential higher notional credit was not permissible as per the Board's Circular. However, the appellants relied on a Tribunal decision to support their claim that once credit is taken, an assessee can take additional credit if the earlier credit was short.

2. Availability of differential higher notional credit:
The Tribunal's decision in a similar case supported the appellants' argument that the right to avail credit under specific rules cannot be denied as long as all other eligibility criteria are met. The appellants contended that they were entitled to the differential higher notional credit based on this principle.

3. Applicability of Board's Circular No. 48/90-CX. 8:
The authorities relied on the Board's Circular to disallow the differential higher notional credit claimed by the appellants. However, the appellants contested this decision by citing the Tribunal's ruling in a previous case to support their position that they were entitled to the credit under the relevant rules.

4. Challenge on the point of limitation:
The key issue addressed by the judgment was the point of limitation. The Deputy Commissioner and the Commissioner (Appeals) invoked the extended period of limitation, alleging that the appellants suppressed the fact of availing differential higher notional credit with the intent to evade duty. However, the judgment highlighted that there was no evidence of suppression as the records submitted by the appellants reflected the credits taken. Consequently, the demand raised after six months was deemed time-barred, leading to the setting aside of the order confirming the duty demand and penalties imposed on the appellants.

In conclusion, the judgment primarily focused on the issue of limitation, determining that the demand raised after the prescribed period was barred by limitation due to the lack of evidence supporting the allegation of suppression of facts by the appellants. The decision favored the appellants, setting aside the order confirming the duty demand and penalties, and granting them consequential reliefs.