2016 (8) TMI 583 - AT - Central Excise

Cenvat credit - Import of goods through carrier - Credit took on Courier Bills of Entry which were mere photocopies - appellant ought to have filed the normal Bill of Entry and only such documents can be used for taking credit - Held that - the appellant has sought several adjournments for furnishing the Original documents or certificates to prove the photocopies of Couriers Bills of Entry. They have not been able to furnish necessary evidence to establish that the credit was rightly availed by them. So on merits the appellants have no case and the recovery of credit calls for no interference. Period of limitation - Cenvat credit - allowability - import of goods through courier - took credit on the photocopies of courier bills of entry - as per Board Circular, No.56/95-Cus-dated 30-05-1995, the appellant ought to have filed the normal Bill of Entry - willful mis-statement and suppression with intent to evade payment of duty - Held that - the allegation in the show cause notice is that the discrepancy came to light from Private records of the appellant. Apart from this bald statement, there is no proof as to what is the private record verified for details of other entries found in such record. The appellant has stoutly denied this contention and submitted that the fact of availing credit on the strength of postal Bills of Entry (couriers) was within the knowledge of the department through the monthly ER-I returns. Along with this statement complying Rule 7 of Cenvat Credit Rules, 2002 was also furnished. In this statement, the appellant had stated the documents as BE. This is countered by the revenue contending that the appellant ought to have stated courier Bills of Entry instead of simply mentioning as BE and there by has deliberately misled the department with intent to evade payment of duty. The fact of availing credit on Bills of Entry has been disclosed by appellants in their ER-I return along with Rule 7 statement. Though they have photocopies of the documents, due to lapse of time they are now unable to produce authenticated copies. The Cenvat Credit Rules do not prescribe any procedure for noting down as postal/.courier bills of entry. It is the Board of circular that prescribed that in case credit is availed on courier BE, the assessee has to file normal BE for availing credit. Therefore, it can be seen that the appellant had disclosed necessary details as required by Act and Rules, and the contention of the department that by showing BE in Rule 7 statement, the appellant committed deliberate suppression of facts or misled the department, is not tenable. The entire information was available to the department as per ER-I returns and the department could have sought clarification in case of doubt. Further, revenue does not dispute the fact of payment of duty upon the impugned documents. The objection raised is merely that the documents are photocopies. For suppression of facts there must be some positive act with intention to evade payment of duty, which is absent in the present case. Therefore, the show cause notice issued invoking the extended period of limitation is not sustainable, being time barred. - Decided in favour of appellant

Summary

Issues:
- Disallowance of Cenvat credit on imported goods through Courier Bills of Entry
- Time-barring of the demand raised by the department

Analysis:
1. The appellants contested the disallowance of Cenvat credit by the Commissioner (Appeals) for importing goods through Courier Bills of Entry instead of normal Bills of Entry. The department alleged a violation of Board Circular No. 56/95-Cus, stating that credit can only be taken on normal Bills of Entry. A show cause notice was issued, leading to the confirmation of disallowance and imposition of penalty. The appellants argued no willful suppression or intent to evade duty, citing disclosure in monthly returns and Rule 7 statements. However, they failed to provide original documents or certificates to support their case.

2. The department maintained that the appellants willfully misrepresented by mentioning only BE in the Rule 7 statement instead of BE-Courier. Despite opportunities, the appellants couldn't produce necessary evidence. The AR argued that the demand, interest, and penalty were rightfully imposed due to the appellants' actions.

3. The Tribunal reviewed the case and found that the appellants repeatedly sought adjournments to provide original documents but failed to do so. As a result, they couldn't prove the legitimacy of the availed credit. The Tribunal concluded that the appellants lacked merit in their case, and the recovery of credit was justified.

4. Regarding the time-barring issue, the period in dispute was 2004-2008, with the show cause notice issued in 2009. The department alleged discrepancies from private records, but the appellants denied this, stating the department had knowledge through ER-I returns and Rule 7 statements. The Tribunal noted that the appellants had disclosed necessary details as required by law, and the department could have sought clarification if needed. As there was no intentional evasion of duty and all relevant information was available to the department, the Tribunal ruled in favor of the appellants on the issue of limitation.

5. Consequently, the Tribunal set aside the impugned order, allowing the appeal with any consequential reliefs. The judgment highlighted the importance of proper documentation and adherence to regulatory requirements in availing Cenvat credit while emphasizing the need for clarity and transparency in dealings with tax authorities.