2017 (2) TMI 484 - AT - Central Excise

CENVAT credit - recovery - Held that - there are no allegations in the SCN that information required in ER-1 was deficient - I, therefore, set aside that part of the Show Cause Notice dated 01/02/2008 which deals with the proposal for the recovery of Cenvat credit amounting to ₹ 7,31,366/- - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of Cenvat credit amounting to ?28,10,861 and ?7,31,366.
2. Appeal against Order-in-Appeal No. 307/CE/APPL/NOIDA/2009 dated 29/10/2009.
3. Challenge of finding regarding inadmissible Cenvat credit of ?2,72,475.

Analysis:

1. The appellant, M/s Denso India Ltd., filed an appeal against Order-in-Appeal No. 307/CE/APPL/NOIDA/2009 dated 29/10/2009, passed by the Commissioner of Central Excise & Customs (Appeals), Noida, which denied Cenvat credit of ?28,10,861 and ?7,31,366. The Original Authority imposed penalties equal to the denied amounts. The Commissioner (Appeals) remanded the matter for recalculation of Cenvat credit of ?28,10,861 and allowed Cenvat credit on various input services amounting to ?4,58,891 out of the ?7,31,366. However, the Commissioner (Appeals) held ?2,72,475 of Cenvat credit as inadmissible, leading to the appellant challenging this finding before the Tribunal.

2. The appellant contended that the Show Cause Notice issued on 01/02/2008, beyond the normal limitation period, proposed the recovery of Cenvat credit of ?7,31,366. The appellant argued that the notice invoked the proviso to Sub-section 1 of Section 11A of the Central Excise Act, 1944, based on information known to the Revenue since 21/06/2006. The appellant relied on a ruling by the Hon’ble High Court of Allahabad in a similar case, highlighting that there was no suppression of fact or deficiency in information submitted in the ER-1 returns. Therefore, the appellant requested setting aside the proposal for denial of Cenvat credit amounting to ?7,31,366.

3. After hearing both parties, the Tribunal found merit in the appellant's arguments. The Tribunal noted that there were no allegations of deficient information in the ER-1 returns, and the case fell within the ratio of the ruling by the Hon’ble High Court of Allahabad. Consequently, the Tribunal set aside the proposal for recovery of Cenvat credit amounting to ?7,31,366. The findings in the Order-in-Appeal regarding this proposal were overturned, and the appeal was allowed. The appellant was entitled to any consequential relief as per the law.