2016 (7) TMI 629 - AT - Central Excise

Denial of credit availed on TMT Rebar Coils, TMT Rebar and cement - time barred demand - Held that - It is seen that the period involved is July 2009. The show-cause notice is dated 01/04/2013, which is beyond the normal period. From the records, as find no evidence to establish that appellant suppressed facts with intent to evade payment of duty. The findings of Commissioner(Appeals) is that appellant ought to have ensured whether credit is admissible before availing credit. This does not amount to suppression. Further the show-cause notice relies upon ER-1 returns filed by appellant. This again established, that appellant disclosed necessary details in ER-1 returns. All these prove that appellant is not guilty of suppression. Therefore the extended period is not invokable. Demand is unsustainable being time-barred. - Decided in favour of assessee

Summary

Issues:
Denial of credit on TMT Rebar Coils, TMT Rebar, and cement; Time-barred demand; Admissibility of credit on the subject items as capital goods post-July 2009.

Analysis:
The appellant, engaged in manufacturing straw boards and paper products, faced denial of credit on TMT Rebar Coils, TMT Rebar, and cement, treated as capital goods. A show-cause notice was issued in January 2013, confirming a demand of Rs.2,60,937 along with penalties and interest. The appellant contended that the demand was time-barred, as they had disclosed credit availed in periodical returns and believed it to be admissible pre-July 2009. The appellant also cited a similar case where credit was allowed on the same items by another authority.

The Commissioner(Appeals) upheld the original order, stating that the appellant should have verified the admissibility of credit before availing it. However, the Tribunal found no evidence of suppression by the appellant to evade duty payment. It was noted that the show-cause notice was issued beyond the normal period, and the appellant had disclosed necessary details in their returns. The Tribunal held that the extended period was not applicable, rendering the demand unsustainable due to being time-barred.

The respondent argued that credit on the subject items was not admissible as capital goods post-July 2009. However, the Tribunal's analysis focused on the time-barred nature of the demand, emphasizing that the appellant had not suppressed any facts and had duly disclosed information in their returns. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential reliefs. The judgment was pronounced on May 9, 2016.