2019 (12) TMI 638 - AT - Central Excise

CENVAT Credit - duty paying invoices - credit taken on the basis of triplicate and quadruplicate copy of invoices - whether credit taken on the basis of triplicate and quadruplicate copy of invoices is deniable under the fact that duty paid character, receipt of inputs and its utilisation and payment of output tax on final product is not in dispute? - time limitation - Time Limitation - whether SCN dated 10.07.1997 for the disputed period September, 1996 is barred by limitation in the absence of any allegation of suppression of facts, or mis-statement etc.? HELD THAT - There is no allegation of any contumacious conduct, suppression of facts or any fraudulent conduct on the part of the appellant. Further, there is no allegation of non receipt of goods by the appellant in respect of which modvat credit was taken. The show cause notice dated 10.07.1997 for the alleged violation relating to the period September, 1996 was admittedly issued beyond the normal period of limitation (six months) from the date of filing of the return. Under Rule 57GG(10) of Central Excise Rules, registered dealer was required to file the monthly return within seven days from the close of each month alongwith the requisite documents. There is no case of deliberate defiance made out against the appellant. Further, the appellant is a Public Sector Undertaking and thus there is no element of taking credit wrongly for personal gain. Further, the ground of limitation was not taken in the earlier round of appeal, however, the same is taken for the first time before the Tribunal. As the question of law arises from the facts on record, the said ground is entertained by this Tribunal. The SCN is bad for invoking the extended period of limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of credit based on triplicate and quadruplicate copy of invoices.
2. Barred by limitation - Show cause notice validity.

Analysis:

Issue 1: Denial of credit based on triplicate and quadruplicate copy of invoices
The appellant, a Public Sector Undertaking, was registered as a dealer of excisable goods under Rule 57GG of Central Excise Rules, 1944. The appellant took input credit amounting to ?30,52,673 based on various copies of invoices. The dispute arose when the Superintendent issued a show cause notice proposing to deny the credit, arguing that Rule 57-I was not applicable to a dealer registered under Rule 57GG. The Assistant Commissioner initially disallowed the credit taken on triplicate and quadruplicate copies but allowed credit based on duplicate and original copies. The matter was remanded multiple times for re-examination. The Tribunal eventually held that the show cause notice was invalid as there was no allegation of suppression of facts, and the notice was issued beyond the normal limitation period of six months from the filing of the return. The Tribunal found no deliberate defiance or fraudulent conduct by the appellant, allowing the appeal and setting aside the disallowance of ?13,81,647 credit taken on triplicate and quadruplicate copies of invoices.

Issue 2: Barred by limitation - Show cause notice validity
The show cause notice dated 10.07.1997 for the disputed period of September 1996 was challenged on the grounds of being time-barred. The appellant argued that the notice was issued beyond the normal period of limitation and no penalties were proposed despite the disallowance of credit. The Tribunal considered the lack of contumacious conduct, suppression of facts, or fraudulent behavior by the appellant. Additionally, the appellant being a Public Sector Undertaking and the absence of personal gain motives were taken into account. The Tribunal entertained the ground of limitation raised for the first time before them, as it was a question of law arising from the facts on record. Ultimately, the Tribunal held that the show cause notice invoking the extended period of limitation was invalid, allowing the appeal and granting the appellant consequential benefits.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT MUMBAI highlights the issues of denial of credit based on different invoice copies and the validity of the show cause notice concerning the limitation period, providing a comprehensive understanding of the legal proceedings and the final decision rendered by the Tribunal.