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2016 (12) TMI 382 - AT - Central ExciseCENVAT credit - manufacture of writing and printing paper - inputs - cement, TMT bars, Aluminium coils, SS sheets/coils, Hydrogen peroxide, caustic soda plate, dyes, fiber drums etc - suppression of facts - Held that - It is stated that the appellant were under bonafide belief that credit is admissible and therefore had availed the credit. The department has no case that the appellant has not disclosed the details of credit availed in the ER- 1 Returns. So also, there is no positive act alleged against the appellant of suppression or willful mis-statement with intent to evade payment of duty. Period of limitation - Held that - The show cause notice dated 08-04-2011 covers the period from 4/2006 to 2/2008, which is beyond the normal period. The Tribunal in the case of Ultratech Cement Ltd Vs CCE, Raipur 2016 (1) TMI 520 - CESTAT NEW DELHI had occasion to analyse a similar situation where the show cause notice was issued invoking extended period - I find that there are no ground for invoking extended period of limitation and the demand, in my opinion is time barred. Appeal filed by assessee is allowed on the ground of limitation. Appeal dismissed - decided against Department.
Issues:
1. Irregular availment of Cenvat credit on various items. 2. Eligibility of credit under inputs or capital goods category. 3. Applicability of limitation period for demand of duty. Analysis: Issue 1: Irregular availment of Cenvat credit The appellant, engaged in manufacturing writing and printing paper, received a show cause notice alleging irregular availment of credit on multiple items. The appellant had reversed duty amounts prior to the notice. The adjudicating authority confirmed a demand of ?11,82,568 along with interest and imposed a penalty, which was later set aside by the Commissioner (Appeals). The appellant filed appeals against the demand and the penalty. The Ld. AR argued that certain items like cement and TMT bars do not qualify as capital goods. However, the Tribunal referred to precedents where eligibility for credit under either inputs or capital goods category was recognized. The Tribunal analyzed the items in question and concluded that credit eligibility needed to be determined based on the nature of the items. Issue 2: Eligibility of credit under inputs or capital goods category The Tribunal considered the period before 07-07-2009 when restrictions on the use of certain items for construction purposes were not in place. The appellant argued that items like cement, TMT bars, Aluminium coil, SS Sheets/coils, etc., were essential for machinery operation or as components of machinery. Precedents were cited to support the view that denial of credit should not occur if the assessee was eligible under either category. The Tribunal analyzed the nature and usage of the items to determine credit eligibility under inputs or capital goods category. Issue 3: Applicability of limitation period The appellant raised the issue of limitation, stating that the show cause notice covered a period beyond the normal timeframe. Citing legal precedents, the Tribunal highlighted the requirement for a positive act of suppression to invoke an extended period of limitation. The Tribunal emphasized that mere non-declaration or a bona fide belief in credit eligibility did not constitute suppression. As the department did not prove any deliberate suppression or willful misstatement by the appellant, the Tribunal concluded that the demand was time-barred. Consequently, the appeal filed by the assessee was allowed on grounds of limitation, while the department's appeal was dismissed. This judgment highlights the importance of correctly categorizing items for Cenvat credit eligibility, considering the nature and usage of the goods. It also underscores the strict interpretation of the limitation period and the necessity for proving deliberate suppression to invoke an extended period for demand of duty.
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