2018 (12) TMI 926 - AT - Central Excise

CENVAT Credit - duty paying invoices - invoices issued by M/s Abhay Kumar Awasthi did not reflect the name of the appellant - extended period of limitation - Held that - Though the Lower Authorities have observed that the appellants have not proved beyond doubt the receipt of the services but appreciating the assessee s stand that the same stand reflected in their books of account and there being no objection to that effect in the show cause notice, it has to be held that appellant was entitled to avail said credit. Time Limitation - Held that - The demand is barred by limitation inasmuch as the appellants were regularly filing returns and were reflecting the said credit in which case demand raised beyond the normal period has to be held as barred by limitation - demand set aside. Demand of Interest - Held that - As the said interest is in respect of the differential duty paid by the appellant in respect of price escalation and in terms of various decisions is required to be paid. However, as per the settled law the limitation aspect would be applicable to the interest demand also - the invoice date on which differential duty was paid by the assessee is not available, it is deemed fit to remand the said aspect to the Original Adjudicating Authority for deciding on the limitation. Penalty - Held that - The payment of interest on the differential duty being a technical issue when all the aspects were known to the Revenue, no mala fide can be attributed to them so as to invoke penal provisions - penalty set aside. Appeal allowed by way of remand.

Summary

Issues:
Denial of Cenvat credit due to missing name on invoices, interest liability on differential duty, contestation of demand on limitation, imposition of penalties.

Denial of Cenvat Credit:
The appellant, engaged in manufacturing motor vehicles, faced a show cause notice denying Cenvat credit of ?1,09,856 availed from M/s Abhay Kumar Awasthi for "Man Power Supply Service" due to missing name on invoices. The appellant argued that services were used and accounted for, with the name lapse being inadvertent. The Tribunal found in favor of the appellant, noting services were reflected in their accounts, entitling them to the credit.

Contestation of Demand on Limitation:
The appellant contested the demand on limitation, stating that all facts were in statutory records, indicating no mala fide intent. The Tribunal agreed, holding that since the appellant regularly filed returns and reflected the credit, the demand raised beyond the normal period was time-barred.

Interest Liability on Differential Duty:
Regarding interest liability on differential duty, the Tribunal referred to various decisions and upheld the payment requirement. However, they remanded the matter to the Original Adjudicating Authority for a decision on limitation due to the unavailability of the invoice date for the duty payment.

Imposition of Penalties:
The Tribunal set aside penalties imposed on the appellant, citing the technical nature of the issues and lack of mala fide intent. They reasoned that since all aspects were known to the Revenue, penal provisions were not warranted.

In conclusion, the Tribunal disposed of the appeal in favor of the appellant, allowing Cenvat credit, holding the demand on limitation as time-barred, upholding interest liability pending a decision on limitation, and setting aside penalties imposed.