2018 (7) TMI 847 - AT - Central Excise

Extended period of limitation - availment of excess deemed credit - export of the processed man made fabrics - Held that - Job workers doing processing of fabrics received from merchant manufacturers cannot be held responsible for mis-declaration of the value of the fabric by merchant manufacturer and there is no legal requirement showered on the processor to verify the correctness of the declarations furnished by owners - the extended period cannot be invoked. The demand is barred by limitation - appeal allowed - decided in favor of appellant.

Summary

Issues: Limitation period for invoking demand on excess deemed credit availed by the appellant based on the value declared by the merchant exporter.

Analysis:
1. The appellant, engaged in processing Man Made Fabrics for merchant exporters, declared the fabric value based on raw material cost provided by the exporters.
2. Revenue found one exporter overvalued fabric, leading to appellant availing excess deemed credit.
3. Show cause notice alleged excess deemed credit of ?3,36,047 by the appellant due to overvaluation.
4. Appellant contested limitation citing reliance on Tribunal decisions where job workers weren't responsible for exporter's misdeclaration.
5. Tribunal noted demand raised in 2004 for 2002, invoking extended limitation period.
6. Tribunal applied precedent, ruling appellant not liable for exporter's misdeclaration, thus barring demand by limitation.
7. Impugned orders were set aside, and both appeals were allowed, emphasizing job workers' non-liability for exporter's valuation errors.