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2019 (12) TMI 175 - AT - Central ExciseRecovery of excess availed CENVAT Credit - sister concern of the appellant unit had raised the invoice for clearance of 4950 kgs of the input viz., Desmodur-MDI as such out of the total quantity of 15750 kgs imported - proportionate credit was required to be availed - time limitation - revenue neutrality - HELD THAT - Due to bona fide mistake appellant has availed entire credit of ₹ 8,63,199/- on the basis of invoices issued by the sister concern. Further, the sister concern has reversed the entire credit of ₹ 8,63,199/- and the same has been availed by the appellant and both the appellant and the sister concern are engaged in the production of identical goods and therefore, it is not the case of the Revenue that both the units have availed the CENVAT credit. It is a situation of revenue neutral because whatever credit has been passed on by the sister concern has been availed by the appellant and in such a situation, it is a settled law that when it is a revenue neutral situation, suppression of facts and mis-declaration cannot be alleged as there is no revenue loss to the Government and no unjust gain to the appellant. Time Limitation - HELD THAT - Entire demand is also barred by limitation because the show-cause notice was issued in 2017 for the period of September 2013 and there is no willful suppression of facts with intention to evade payment of duty - the impugned order demanding reversal of CENVAT credit is not sustainable on merit as well as on limitation. Appeal allowed - decided in favor of appellant.
Issues:
1. Availment of excess CENVAT credit by the appellant. 2. Rejection of the appeal by the Commissioner (A). 3. Allegation of suppression of facts and mis-declaration by the department. 4. Bar of limitation for the demand raised by the department. Analysis: Issue 1: Availment of excess CENVAT credit by the appellant The appellant availed CENVAT credit of ?8,63,199 based on an invoice from its sister concern for 4950 kgs of input, but the appellant availed credit for the total quantity of 15750 kgs imported. The department issued a show-cause notice for recovery of the excess credit. The lower authority confirmed the demand, leading to the appeal before the Commissioner. Issue 2: Rejection of the appeal by the Commissioner (A) The Commissioner rejected the appeal, prompting the appellant to file an appeal challenging the decision. The appellant argued that the impugned order was not sustainable in law and failed to appreciate the facts and the law properly. Issue 3: Allegation of suppression of facts and mis-declaration by the department The appellant contended that there was no suppression of facts or intention to evade payment of duty as the entire transaction was revenue neutral. The appellant argued that the mistake in availing the credit did not lead to any revenue loss for the government, citing various legal precedents to support this argument. Issue 4: Bar of limitation for the demand raised by the department The appellant asserted that the entire demand was time-barred as there was no willful suppression of facts to evade duty payment. The appellant relied on the decision of the Bombay High Court to support the argument that when there is revenue neutrality, suppression cannot be alleged, and the extended period of limitation cannot be invoked. In the final judgment, the Tribunal found that the appellant had made a bona fide mistake in availing the entire credit, but the sister concern had reversed the same amount. As both units were engaged in producing identical goods, the situation was deemed revenue neutral. Consequently, the Tribunal held that there was no suppression of facts or mis-declaration, and the demand for reversal of CENVAT credit was not sustainable on merit or limitation grounds. Therefore, the Tribunal allowed the appeal of the appellant, setting aside the impugned order.
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