2017 (4) TMI 214 - AT - Central Excise

Time limitation - Section 11A - CENVAT credit - freight for outward transportation of goods from the factory gate to premises of ultimate customers - Held that - It is clear from the definition of relevant date that the period of one year has to be reckoned from the date of filing of monthly return or the last date for filing of such return. It is further specified in Rule 12(1) of the CER 2002 that the monthly return has to be filed within 10th of the following month. Consequently the SCN covering the demand of the earliest month in the present dispute i.e. month of May 2012 can be up to 10th June 2013. In the present case the SCN issued on 23-5-2013 and hence it is within time - appeal dismissed - decided against assessee.

Summary

Issues:
- Disallowance of Cenvat credit on Service Tax paid on outward transportation of goods
- Time-bar for issuance of show cause notice

Analysis:
1. The appeal was filed against the order passed by the Commissioner (Appeals) regarding the disallowance of Cenvat credit availed by the appellant on Service Tax paid for outward transportation of goods. The Revenue contended that such credit was not allowable as the sale took place at the factory gate.

2. The advocate for the appellant argued that the demand was time-barred as Service Tax on outward transportation was paid during a specific period, and the show cause notice was issued after the time limit. He highlighted that two previous show cause notices on the same issue had already been issued to them.

3. The Revenue's representative countered by stating that the time limit for issuing a show cause notice should be calculated based on the date of filing the monthly return. He emphasized that the Cenvat credit was availed during a particular period, and the show cause notice was issued within the stipulated time frame.

4. The central issue in the appeal was whether the show cause notice was issued within the prescribed time limit as per Section 11A, which mandates a one-year period for cases not involving an extended duration. The calculation of this period is linked to the filing date of the monthly return, as per Rule 12(1) of the Central Excise Rules, 2002.

5. The judgment clarified that the relevant date for calculating the one-year period is based on the monthly return filing date or its deadline. In this case, the show cause notice issued on 23-5-2013 was deemed within the time limit, considering the filing requirements. Consequently, as the appellant did not challenge the demand on its merits and the notice was served within the prescribed time frame, the impugned order was upheld, and the appeal was rejected.