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2019 (3) TMI 182 - AT - Central ExciseCENAT Credit - credit on excise invoices produced by the appellant - suppression of facts or not - time limitation - Held that - In the impugned order, the Commissioner (A) has recorded in para 6 that there is a statement of the appellant dated 8.8.2003 wherein they have explained the procedure regarding availment of CENVAT credit, which means that the appellants have not suppressed the relevant information from the Department. Thereafter, the Department issued the show-cause notice on 1.4.2007 after almost four years after the disclosure of information by the appellant regarding their method of taking the CENVAT credit. Once the department was aware of the procedure followed by the appellant for taking the CENVAT credit subsequently the department cannot allege suppression with intention to evade duty. It is settled law that mere failure to declare the information does not amount to willful mis-declaration or willful suppression. There must be some positive act on the part of the party to establish willful mis-declaration or willful suppression. The entire demand is barred by limitation - appeal allowed - decided in favor of appellant.
Issues:
1. Proper availing of CENVAT credit based on commercial invoices without excise particulars. 2. Allegations of suppression of facts and intention to avail ineligible credit. 3. Time limitation for issuing show-cause notice and invoking extended period. 4. Admissibility of CENVAT credit based on commercial invoices. 5. Legal precedent and judicial decisions supporting the appellant's case. Issue 1: Proper availing of CENVAT credit based on commercial invoices without excise particulars: The case involved the appellant, a manufacturer of readymade garments, who received inputs without excise particulars on commercial invoices and utilized CENVAT credit based on them. The original authority issued a show-cause notice demanding recovery under the Central Excise Act, which was confirmed with interest and penalty. The Commissioner (A) remanded the matter for reworking the CENVAT credit, leading to an appeal before CESTAT, Bangalore. Issue 2: Allegations of suppression of facts and intention to avail ineligible credit: The appellant argued that they disclosed their methodology of availing credit to the Department in 2003 and had not suppressed any relevant information. The Department issued the show-cause notice almost four years later, and the appellant contended that the demand was time-barred. The appellant maintained that there was no willful mis-declaration or suppression of facts, citing legal precedents to support their case. Issue 3: Time limitation for issuing show-cause notice and invoking extended period: The appellant argued that the show-cause notice issued after almost four years from the disclosure of their credit availing methodology was beyond the statutory time limit. The Tribunal held that once the Department was aware of the appellant's credit procedure, they could not allege suppression with intent to evade duty. The Tribunal found the entire demand to be barred by limitation. Issue 4: Admissibility of CENVAT credit based on commercial invoices: The appellant defended their use of commercial invoices for availing CENVAT credit, while the Department contended that excise invoices were necessary. The Tribunal noted that the appellant had informed the Department of their credit availing process and found no suppression of relevant information, leading to the dismissal of the demand based on commercial invoice usage. Issue 5: Legal precedent and judicial decisions supporting the appellant's case: The appellant relied on legal precedents such as CCE vs. Royal Enterprises, CCE vs. Mahindra and Mahindra Ltd., and Roma Henny Security Service Pvt. Ltd. vs. CST, Delhi to argue that mere omission to disclose information does not constitute suppression of facts unless there was a deliberate attempt to evade duty. The Tribunal, considering these precedents, held that the demand was barred by limitation and set aside the impugned order. This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the Tribunal's decision based on legal principles and precedents cited during the proceedings.
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