2020 (10) TMI 158 - AT - Central Excise

Reversal of CENVAT Credit - time limitation - Rule 3(5A) of the CENVAT Credit Rules, 2004 - Revenue Neutrality - HELD THAT - The appellant is seeking the benefit of time bar merely by submitting that the goods i.e. the scarp items have been transferred to their other factory at Ghaziabad and hence, whatever duty is paid at Sambalpur factory will be available as credit at the recipient Ghaziabad factory and hence there would be a revenue neutral situation. The above contention is being raised for the first time before the Tribunal which was never pleaded before both the authorities below and hence cannot be allowed to be taken at this stage. The appellant appears to have been involved all along in delaying the adjudication and appeal proceedings. Moreover, the appellant has not submitted any rebuttal to the findings made by the original authority, which are grave in nature, while confirming the duty demand. The appellant is not entitled to seek the mercy of time bar benefit - Appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against duty demand upheld by lower authorities based on failure to reverse credit for cleared capital goods as scrap; Appellant's non-appearance in hearings leading to ex-parte orders; Claim of transferring goods to another factory for revenue neutral situation raised for the first time before Tribunal.

Analysis:
The appeal was filed against an Order-in-Appeal upholding a duty demand of ?62,227 plus interest and penalty imposed by the Assistant Commissioner for the period 2011-12. Despite multiple opportunities, the appellant, M/s. Rathi Steel & Power Ltd, did not appear for hearings. The appellant had cleared capital goods as scrap, triggering the requirement to reverse credit under Rule 3(5A) of the CENVAT Credit Rules, 2004. The audit revealed non-reversal of credit, leading to a duty demand. The appellant contended that no credit was availed during procurement, supported by purchase invoices without duty charges. However, the Assistant Commissioner issued an ex-parte order confirming the duty demand, citing discrepancies in the invoices and accusing the appellant of misleading the department.

In the subsequent appeal before the Commissioner (Appeals), the appellant's non-appearance resulted in an ex-parte order upholding the demand. The appellant then raised a new argument before the Tribunal, claiming a revenue neutral situation due to transferring goods to another factory. However, the Tribunal rejected this argument, noting it was not raised earlier and the appellant's history of delaying proceedings. The Tribunal found no rebuttal to the serious findings of the original authority, concluding that the appellant was not entitled to time bar benefit. Consequently, the appeal was dismissed, affirming the duty demand.

In essence, the Tribunal emphasized the importance of timely participation in proceedings and adherence to procedural requirements. The case highlights the significance of presenting all relevant arguments at the appropriate stages of litigation and the consequences of failing to do so. The judgment underscores the need for parties to actively engage in the adjudicatory process to ensure a fair and comprehensive resolution of disputes.