2015 (2) TMI 919 - AT - Central Excise

Denial of CENVAT Credit - CENVAT Credit paid on the Furnace oil used in generation of electricity cleared to other units - Held that - The present show cause notice dt.10.09.2007 was issued for the period from March 2003 to November 2003. In my considered view, when the demand of duty against the earlier show cause notice was set aside as time barred, thus, the demand of duty for the extended period of limitation, on the same facts in the present show cause notice cannot be sustained. The findings of the Tribunal in the appellant s own case for the earlier period would be squarely applicable in the present case. Hence, demand of CENVAT Credit to the extent of ₹ 11,92,394.00 along with interest and penalty is set aside is barred by limitation. In so far as demand of CENVAT Credit of ₹ 8,158.00 along with interest and penalty is upheld. Penalty imposed on the appellant No.2 cannot be sustained - Following decision of assessee's own previous case 2012 (7) TMI 603 - CESTAT, AHMEDABAD - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of CENVAT Credit on Furnace oil used for generating electricity.
2. Imposition of penalties on the appellant company and General Manager.
3. Application of limitation period for the demand of duty.

Analysis:
1. The case involved the disallowance of CENVAT Credit amounting to &8377; 12,00,552.00 on Furnace oil used for generating electricity, which was cleared to other units during a specific period. The adjudicating authority confirmed the demand along with interest and penalties on the appellant company. A penalty was also imposed on the General Manager under Rule 26 of Central Excise Rules 2002. The Commissioner (Appeals) upheld the adjudication order, leading to an appeal by the appellant.

2. The advocate representing the appellant acknowledged the unfavorable merits of the case based on a Supreme Court decision and contested the demand of duty on the grounds of limitation. Referring to a previous case involving a similar issue, the advocate highlighted that a portion of the demanded amount was not contested. On the other hand, the Authorized Representative for the Revenue supported the findings of the Commissioner (Appeals) and argued against the applicability of the earlier Tribunal decision in the present case.

3. Upon reviewing the records and considering the previous Tribunal decision on a similar issue, the judge noted that a show cause notice issued for an earlier period was set aside as time-barred. Applying the principle of limitation, the judge concluded that the demand of duty for the extended period in the present show cause notice could not be sustained. The judge held that the demand of CENVAT Credit to a certain extent was barred by limitation, while a portion of the demand was upheld. The penalty imposed on the General Manager was deemed unsustainable, leading to the allowance of the appeal with consequential relief and the disposal of the application for extension of the stay order.

This detailed analysis of the judgment highlights the key issues of disallowance of CENVAT Credit, imposition of penalties, and the application of the limitation period, providing a comprehensive understanding of the legal proceedings and the final decision rendered by the Appellate Tribunal CESTAT AHMEDABAD.