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TMI Blog2012 (12) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... ant - When the Appellant were declaring clearance of Zinc dross/ash without payment of duty as exempted goods in the ER-I Return, they can not be accused of suppressing the relevant information, more so, when there are a series of instructions of the Board directing field offices to scrutinize the ER-I Returns carefully - longer limitation period under provisions of Section 11A(1) is not available to the Department and show cause notice dated 26-8-2009 is time barred. For the same reason, the penalty under Section 11AC is also not imposable - imposition of penalty under Section 11AC is, therefore, not sustainable. X X X X Extracts X X X X X X X X Extracts X X X X ..... le 6(3) of Cenvat Credit Rules, 2004 along with interest under Rule 14 of the Cenvat Credit Rules, 2004; and (b) Imposition of penalty on the appellant under Rule 15(2) ibid. 1.1 The show cause notice was adjudicated by the Assistant Commissioner vide order-in-original dated 30-11-2009 by which the demand of Rs. 2,84,210/- was upheld along with interest and penalty of equal amount was imposed on the appellant under Rule 15(2). 1.2 On appeal to the CCE (Appeals), the Asstt. Commissioner's order was upheld vide order-in-appeal dated 15-6-2011 against which this appeal along with stay application has been filed. 2. Heard both the sides. Though this matter was listed for hearing of the stay application, after hearing the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no wilful mis-statement, fraud or suppression of facts, etc. on the part of the appellant and for the same reason, no penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC is imposable and that the impugned order, therefore, is not sustainable. 4. Shri Nagesh Pathak, the learned Senior Departmental Representative, defending the impugned order by reiterating the findings of the Commissioner (Appeals) in it, pleaded that zinc dross is covered by the definition of 'exempted goods' and hence, the provision of Rule 6(3) of Cenvat Credit Rules have been correctly invoked. He also pleaded that the demand is not time barred and extended period has been correctly invoked as during the period of dispute, the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or chargeable to nil rate of duty or non-excisable, the position of payment of 10% under the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 remains the same", is incorrect. 6. When the provisions of Rule 6 are not applicable to this case for the reason that zinc dross being non-excisable, is not "exempted goods", the question arises whether the Appellant can enjoy input/input service credit attributable to the non-excisable goods zinc dross. The answer to this question would be in the negative, as the Authority for framing Cenvat Credit Rules, comes from clause (xvia) of Section 37(2) of the Central Excise Act, 1944 which reads as under :- "provide for the credit of duty paid or deemed to have been paid on the goods used in or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) E.L.T. 3 (S.C.). When the Appellant were declaring clearance of Zinc dross/ash without payment of duty as exempted goods in the ER-I Return, they can not be accused of suppressing the relevant information, more so, when there are a series of instructions of the Board directing field offices to scrutinize the ER-I Returns carefully. In view of this, the longer limitation period under provisions of Section 11A(1) is not available to the Department and show cause notice dated 26-8-2009 is time barred. For the same reason, the penalty under Section 11AC is also not imposable. The impugned order upholding the demand and imposition of penalty under Section 11AC is, therefore, not sustainable. 8. In view of the above discussion, the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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