2016 (9) TMI 183 - AT - Central Excise

Period of limitation - returned goods - availed cenvat credit in terms of Rule 16 of the Central Excise Rules, 2002 on 5 duty paid machines received - machines brought back to the factory of the appellant but have not been subject to any process whatsoever for a very long time - Held that - the reasons cited by the appellant for return of such goods is either brought back for repair or returned after exhibition outside the factory. I am of the view that such reasons will be covered by the expression for any other reason. My views find support in the order of the Tribunal in the Apollo Tyres Ltd. vs. CCE, Pune III 2010 (2) TMI 846 - CESTAT, MUMBAI . In the decision of the Tribunal in the Crompton Greaves Ltd. vs. CCE, Mumbai III 2007 (1) TMI 353 - CESTAT, MUMBAI it has also been categorically held that Rule 16 does not prescribe any time limit within which the goods are required to be cleared. It is also pertinent to mention that at the time of visit of the Central Excise officers to the factory, the goods were found within the factory. It is also on record that subsequently the goods stand cleared from the factory and the credit availed have already been reversed. Also intimation in Format D-3 stand filed by the appellant on receipt of each of these machines. Consequently the show cause notice issued by Revenue on 04/7/2013 for credits taken during the period 26/8/09 to 31/3/11 would be hit by time bar. - Decided in favour of appellant

Summary

Issues:
1. Availing Cenvat credit on duty paid machines under Rule 16 of Central Excise Rules, 2002.
2. Time bar for raising demand on Cenvat credit availed.
3. Irregularity in availing credit on goods not procured/imported in the appellant's name.

Analysis:
1. The appellant, engaged in manufacturing, availed Cenvat credit on duty paid machines like Wheel loaders, Excavators & Backhoe loader under Rule 16. The dispute arose when the Revenue alleged that the credit was wrongly availed as the machines were not processed in the factory. The appellant argued that the machines were brought back for repair or after exhibition, falling under "for any other reason" in Rule 16. Citing case laws, the appellant contended that the demand was time-barred. The Tribunal, referring to Rule 16, supported the appellant's view that the reasons for return fell under "for any other reason." The Tribunal also noted that the goods were eventually cleared from the factory, and the credits were reversed. The appellant's argument on time bar was upheld based on intimation filed in Format D-3.

2. The time bar issue was crucial as the Revenue raised a demand for credits taken during a specific period. The Tribunal found the show cause notice issued beyond the statutory time limit, hence declaring it time-barred. The intimation filed by the appellant upon receipt of machines played a significant role in establishing the time bar defense, leading to the setting aside of the impugned order.

3. The irregularity in availing credit on goods not procured/imported in the appellant's name was raised by the Revenue. Citing a case law, the Revenue argued that as the goods were imported by the appellant's trading unit with documents in the trading unit's name, the credit availed was irregular. However, the Tribunal found the case laws cited by the Revenue distinguishable and not applicable to the present case. The Tribunal's decision to set aside the impugned order was based on the lack of merit in the Revenue's argument regarding irregularity in availing credit on goods not in the appellant's name.

In conclusion, the Tribunal allowed the appeal, setting aside the impugned order based on the appellant's valid availing of Cenvat credit under Rule 16, the time-bar defense supported by intimation filings, and the lack of merit in the Revenue's argument regarding irregularity in availing credit on goods not in the appellant's name.