2022 (6) TMI 672 - AT - Central Excise

CENVAT Credit - input - input services - capital goods - invocation of extended period of limitation - rejection of credit on the ground that the concerned invoices appeared to more than one year old on date of taking credit - HELD THAT - The appellant have maintained regular books of accounts and records in the normal course of business. Further, they have been subjected statutory audit by the department time to time. On such facts and circumstances, the extended period of limitation is not invokable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Disallowance of Cenvat credit of Rs. 2,76,650.
2. Barred by limitation - Extended period of limitation not applicable.
3. Regular audit conducted - No suppression or contumacious conduct.
4. Applicability of penalty.
5. Comparison with a previous Tribunal ruling.
6. Maintenance of regular books of accounts and records.

Analysis:

1. The primary issue in this appeal was the disallowance of Cenvat credit amounting to Rs. 2,76,650. The appellant had wrongly availed Cenvat credit on inputs, input services, and capital goods, which were more than one year old at the time of taking credit.

2. The appellant contested the Show Cause Notice (SCN) on the grounds of limitation, arguing that the extended period of limitation was not applicable as they maintained regular books of accounts and filed returns. The Assistant Commissioner upheld the disallowance of Cenvat credit but dropped the balance demand.

3. The appellant further argued that there was no suppression or contumacious conduct on their part, as the records were maintained and information was supplied to the department during the enquiry. They cited a Tribunal ruling where the extended period of limitation was not invoked due to regular audits by the department.

4. The issue of penalty imposition was also raised by the appellant, contending that no penalty should be imposed based on the facts of the case. The Tribunal considered these arguments and the appellant's compliance with audits and records maintenance.

5. The appellant compared their case with a previous Tribunal ruling involving a similar issue of Cenvat credit disallowance. They highlighted the regular audits conducted on their records and the satisfaction of objections raised during those audits.

6. Ultimately, the Tribunal found in favor of the appellant, stating that the extended period of limitation was not applicable due to the maintenance of regular books of accounts, records, and statutory audits by the department. The impugned order was set aside, and the appellant was entitled to consequential benefits.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's decision, providing a comprehensive understanding of the legal aspects involved in the case.