2013 (2) TMI 414 - AT - Central Excise

Waiver of Pre-deposit - Extended period of limitation u/s 11A - Demand - Suo motu availment of credit on 27.2.2008 - Intimated to the department by the appellant vide letter dated 28.2.2008 - Department issued a notice dated 17.6.2011 demanding reversal of suo motu credit - Held that - In spite of this information furnished by the appellant, the department issued notice only on 17.6.2011, i.e. after lapse of about 3 years. Prima facie the appellant has made out a strong case in their favour on the ground of limitation. Waive pre-deposit and stay granted

Summary

Issues:
Demand of duty on suo motu availment of credit; Barred by limitation of time.

Analysis:
The judgment by Appellate Tribunal CESTAT MUMBAI pertains to an appeal and stay application against an order-in-appeal passed by the Commissioner of Central Excise (Appeals), Mumbai III. The main issue involved in this case is the demand of duty on the suo motu availment of credit by the appellant, M/s. Kim Chemicals Ltd., Raigad. The department contended that there was no provision or rules for availing suo motu credit and demanded reversal of the credit taken by the appellant on 27.2.2008 through a notice dated 17.6.2011. The demand was confirmed with interest and penalty by the lower appellate authority, leading the appellant to appeal before the Appellate Tribunal.

The appellant argued that they had intimated the department about the availment of suo motu credit on the very next day after taking it, i.e., on 28.2.2008. Despite this, the department issued a show-cause notice after a significant delay of about 3 ½ years. The appellant contended that the demand is barred by the limitation of time, and on this ground alone, requested a stay. The revenue, represented by the ld. AR, reiterated the findings of the lower authorities.

Upon careful consideration of the submissions from both sides, the Appellate Tribunal noted that the appellant had promptly informed the jurisdictional Superintendent about the suo motu credit taken on 27.2.2008, the very next day. Despite the timely intimation by the appellant, the department issued the notice after a considerable delay of about 3 ½ years. The Tribunal found that the appellant had a strong case in their favor on the ground of limitation. Consequently, the Tribunal granted a waiver from pre-deposit of the dues adjudged against the appellant and stayed the recovery of the amount during the pendency of the appeal.