2016 (12) TMI 903 - AT - Central Excise

Invocation of extended period of limiatation - Denial of cenvat credit - structural steel items such as MS Joists, MS Channels, Steel Plates, CTD Bars, MS Angles, MS Flat, MS Beam falling under chapter 72 of the Central Excise Tariff Act, 1985 - SCN issued by department beyond 1 year - Held that - It is an admitted fact on record that the SCNs were issued by the Department beyond the period of one year from the relevant date. The proviso to Section 11A has been invoked for recovery of the amount in question. Since the appellant had intimated the Central Excise Department regarding taking of cenvat credit on the disputed goods in its monthly ER-1 return, the allegation of suppression, misstatement, etc. cannot be leveled against the appellant, justifying invocation of extended period of limitation. Rule 12 of the Central Excise Rules, 2002 cast the responsibility on the proper officer to scrutinize the correctness of the information furnished in the periodical return and to call for any additional document from the assessee for necessary verification. In the present case, since the Jurisdictional Central Excise authorities have not raised any objection that the return filed by the appellant are not proper or correct, the SCN, in such an eventuality, should be confined to the period of one year from the date of filing of such return by the appellant. Thus, in absence of any specific findings regarding the involvement of the appellant in any fraudulent activities concerning fraud, collusion, suppression of fact, etc., I am of the considered opinion that longer period of limitation cannot be invoked for confirmation of demand. Demand not sustainable - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues: Denial of cenvat credit on structural steel items under chapter 72 of the Central Excise Tariff Act, 1985; Invocation of extended period of limitation for recovery of the amount in question.

In the judgment, the appellant contested the denial of cenvat credit on structural steel items such as MS Joists, MS Channels, Steel Plates, CTD Bars, MS Angles, MS Flat, MS Beam under chapter 72 of the Central Excise Tariff Act, 1985. The appellant argued that the disputed goods were used in relation to the manufacture of final products, not as structures or supporting structures of capital goods. The appellant also highlighted that the SCNs issued by the Department were time-barred, as they were issued beyond the limitation period. The appellant contended that since the cenvat credit particulars were reflected in the ER-1 return, the extended period of limitation could not be invoked based on allegations of suppression or misstatement. The appellant referred to previous Tribunal decisions to support the argument that in cases of ambiguity in interpreting statutory provisions, the extended period of limitation should not apply.

On the other hand, the Revenue representative reiterated the findings in the impugned order, supporting the denial of cenvat credit on the disputed goods. The Tribunal, after hearing both sides and examining the records, noted that the SCNs were indeed issued beyond the one-year limitation period. The Tribunal considered that since the appellant had informed the Central Excise Department about taking cenvat credit on the disputed goods in the monthly ER-1 return, allegations of suppression or misstatement could not be upheld to justify the invocation of the extended period of limitation. The Tribunal pointed out that Rule 12 of the Central Excise Rules, 2002 placed the responsibility on the proper officer to verify the information provided in the periodical return. Since no objections were raised by the authorities regarding the correctness of the appellant's returns, the Tribunal concluded that the SCN should have been limited to the one-year period from the date of filing the return. Without specific findings of fraudulent activities by the appellant, such as fraud, collusion, or suppression of facts, the Tribunal held that the longer period of limitation could not be invoked to confirm the demand. Consequently, the Tribunal found no merit in the impugned order regarding the limitation aspect, setting it aside and allowing the appeal in favor of the appellant.