2013 (10) TMI 716 - AT - Central Excise

Extended Period of Limitation ineligible availment of cenvat credit of NCCD credit on the captive consumption of POY yarn - Waiver of Pre-deposit - Held that - Following MODERN PETROFILS Versus COMMISSIONER OF CENTRAL EXCISE, VADODARA 2010 (259) E.L.T. 411 (Tri. - Ahmd.) - The period involved is December 2005 to March 2006 and the show cause notice was issued by invoking extended period - When department was aware of violation of procedure in availment of cenvat credit by the assessee for the period March 2003 to July 2004, we are unable to understand why the department did not issue a show cause notice for the subsequent period within the period of limitation - prima facie the extended period cannot be invoked in the case - the appellant has made out a case for the waiver of pre-deposit of amounts involved only on the ground of limitation - pre-deposit of amounts involved is allowed to be waived Stay granted.

Summary

Issues:
- Eligibility of cenvat credit on captive consumption of POY yarn
- Invocation of extended period for issuing show cause notice

Analysis:
1. Eligibility of Cenvat Credit: The main issue in this case revolves around the eligibility of cenvat credit on the captive consumption of POY yarn. The Tribunal notes that in a previous similar case, a show cause notice was issued for the same issue, and a decision was made against the assessee. However, in the current case, the period under consideration is different, and the department invoked the extended period for issuing the show cause notice. The Tribunal questions the department's decision not to issue a show cause notice for the subsequent period within the period of limitation, especially when they were already aware of the violation in the earlier period. Despite the previous decision against the assessee, the Tribunal opines that the extended period cannot be invoked in the current case.

2. Invocation of Extended Period: The Tribunal critically analyzes the timeline of events and the department's actions regarding the invocation of the extended period for issuing the show cause notice. They express confusion as to why the department did not take action within the period of limitation for the subsequent period when they were already aware of the violation in the earlier period. The Tribunal finds that the appellant has a strong case for the waiver of pre-deposit of amounts involved solely on the ground of limitation. Consequently, the Tribunal allows the application for the waiver of pre-deposit and stays the recovery of the amounts until the appeal is disposed of.

In conclusion, the judgment by the Appellate Tribunal CESTAT Ahmedabad primarily focuses on the eligibility of cenvat credit on captive consumption of POY yarn and the invocation of the extended period for issuing the show cause notice. The Tribunal questions the department's actions and decision-making process, ultimately granting the waiver of pre-deposit based on the grounds of limitation.