2016 (8) TMI 1065 - AT - Central Excise

Whether Appellant M/s.Sai Electrocasting Ltd. (Now M/s.Super Smelters Ltd., Unit-2) has correctly taken Cenvat Credit on certain capital goods received in their factory premises along with duty paying documents - Held that - in view of the settled proposition of law it cannot be held that Respondent had any mala fide intention to take wrong Cenvat Credit when both capital goods and the duty paying documents, bearing the registration number of the supplier, were received by the Respondent and recorded in their statutory records credit was rightly taken. Further as Respondent did not have any mala fide intention while taking credit, therefore, extended period in demanding Cenvat Credit is not sustainable. Show cause notice in this case was issued on 22.09.2009 whereas the Cenvat Credit was taken in the month of May, 2007. Accordingly demand is also time barred. Therefore, there is no reason to interfere with the Order-in-Appeal. - Decided against the Revenue

Summary

Issues Involved:
Whether the appellant correctly took Cenvat Credit on capital goods received, supplier's infrastructure verification, time-barred demand.

Analysis:
1. Verification of Supplier's Infrastructure:
The main issue in this case is whether the appellant correctly took Cenvat Credit on certain capital goods received in their factory premises along with duty paying documents. The Revenue argued that the supplier did not have sufficient infrastructure for manufacturing the capital goods. However, it was observed that both the duty paying documents and the capital goods were received by the appellant and reflected in their statutory records. The supplier had a Central Excise registration number, which was suspended later. The rule does not mandate the recipient to verify the supplier's infrastructure. The absence of evidence showing the appellant had knowledge about the supplier's lack of infrastructure led to the dismissal of the Revenue's appeal.

2. Precedents and Legal Interpretation:
The advocate for the respondent cited several case laws to support their argument, emphasizing that the duty paying documents and the existence of the supplier were sufficient under Rule 9(3) of the Cenvat Credit Rules. The judgment referred to a similar case where the appellant was found eligible for credit despite the original manufacturer lacking the facility for manufacturing the goods. The absence of evidence proving mala fide intention or knowledge on the part of the appellant supported the decision to dismiss the Revenue's appeal.

3. Time-Barred Demand:
Another crucial aspect addressed in the judgment was the time-barred demand. The show cause notice was issued after a significant period from when the Cenvat Credit was taken. Since there was no evidence of mala fide intention or wrongdoing on the part of the appellant, the demand was deemed time-barred. The judgment highlighted the importance of corroborative evidence and the need for cross-examination of witnesses relied upon by the Revenue.

In conclusion, the judgment upheld the appellant's right to Cenvat Credit based on the documents received, dismissed the Revenue's appeal due to lack of evidence of mala fide intention, and deemed the demand time-barred. The decision was supported by legal interpretations, precedents, and the specific circumstances of the case, emphasizing the importance of following procedural requirements and providing substantial evidence in such matters.