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2018 (7) TMI 1049 - AT - Central Excise


Issues:
Appeal against order rejecting appellant's appeal and upholding Order-in-Original. Dispute regarding CENVAT credit on inputs sent for job work not received back within 180 days. Legal entity change of the company. Demand of duty on captively manufactured goods. Time-barred demand.

Analysis:
The appeal challenged the order rejecting the appellant's appeal and upholding the Order-in-Original related to a dispute concerning the CENVAT credit on inputs sent for job work but not received back within 180 days. The appellant, engaged in manufacturing automobile forged products, availed credit of duty paid on various inputs and capital goods required for manufacturing. The dispute dated back to 2002-03 before the units were taken over. The Department conducted an investigation, issued a show-cause notice, and demanded duty, interest, and penalty. The appellant argued that the demand was unsustainable due to the absence of a recovery mechanism under Rule 4 of CENVAT Credit Rules during the relevant period. The appellant relied on judicial precedents to support their argument.

The appellant contended that the legal entity had changed since 2004, making the show-cause notice issued to the previous entity unsustainable. They also argued that the demand for duty on captively manufactured goods was not valid. The appellant highlighted that the demand was time-barred as it pertained to the period 2002-03, and the show-cause notice was issued in 2006. The appellant presented evidence to support their claim that they had followed Central Excise procedures for job work and had faced challenges in tracing documents due to the change in management.

The Revenue defended the impugned order, asserting that the appellant had availed CENVAT credit on inputs sent for job work but not received back within 180 days, necessitating the reversal of the credit. They alleged that the appellant had suppressed facts with the intent to evade duty payment. After considering both parties' submissions and reviewing the records, the Tribunal found that the demand for CENVAT credit on inputs not received back within 180 days was not sustainable as there was no recovery mechanism under Rule 4 before 2011. The Tribunal also ruled that the demand on captively manufactured goods and the time-barred demand were not valid. The appeal succeeded on merits and limitation, leading to setting aside the impugned order and allowing the appeal with any consequential reliefs.

The judgment provided a detailed analysis of the issues raised, considering legal provisions, judicial precedents, and factual circumstances to arrive at a reasoned decision. The Tribunal's findings were based on a thorough examination of the law, facts, and arguments presented by both parties, resulting in a favorable outcome for the appellant on both substantive and procedural grounds.

 

 

 

 

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