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TMI Blog2016 (7) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... available to substantiate any kind of fraud or collusion or any willful mis-statement or suppression of facts or contravention of any provisions of laws concerning Central Excise and/or Service Tax with an intention to evade payment of duty on the part of the appellant for recovery of any short levy or short payment of duty for the period of five years from the relevant date. Here, the Show-cause notice has been issued on 17.8.2012. Therefore, any demand for the period prior to July 2011 is clearly barred by limitation as per the provisions of Section 11A(4) of Central Excise Act, 1944. Consequently, it is held that the Revenue can recover the demand only for the normal period of one year from the relevant date. During this normal period of one year, the demand would be restricted to reversal of the proportionate credit of input services. Decided partly in favor of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... redit availed on the inputs and input services used in the manufacture of exempted final products. (vi) In any case, the demand is barred by limitation. (B). Demand of ₹ 35,88,72,223/- (i) The period involved is from April 2008 to June 2012. The appellant for the period April, 2008 to June, 2012 has reversed an amount of ₹ 4,15,12,424/-. (ii) It is undisputed that the proportionate credit of inputs has been reversed by the appellant, which implies that the appellant has exercised the option under Section 6(3)(ii). Therefore, the option under 6(3)(i) cannot be forced upon the appellant. (iii) Further, for the period from 01.04.2011, Rule 6(3)(iii) provides for the option for maintaining separate account for inputs and reversing proportionate credit of input services. (iv) Therefore, demand, if any, should be limited to the proportionate credit on input services. It is also submitted that during a subsequent audit, it was pointed out that the appellant has to reverse proportionate credit on input services and accordingly, the appellant has reversed Cenvat Credit on input services for the period from 2010-11, 2011-12, 2012-13. Proof of reversal of the Cenvat Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envat Credit Rules, 2004 have undergone tremendous change during the relevant period and the department itself was not very clear on the exact legal position. Reliance is placed on the decision of the Tribunal in CCE., Chennai vs. Gayatrishakti Paper & Boards Ltd. - 2013 (294) ELT 260 (Tri.-Ahmd.) (vii) If according to the Commissioner, there is no evidence of reversal of input services, the demand at the most can be restricted to the quantity of input services attributable to the exempted clearances. (viii) For the period after June, 2012, the appellant has reversed the proportionate credit of input service in 2013 itself, pursuant to the audit conducted by the Department. 4. Revenue has been represented by learned A.R., Shri Mohd. Yusuf, who has reiterated the findings given in the impugned order. The Revenue s submissions are inter-alia as follows : (i) The appellant has availed the credit on various inputs and input services used in the manufacture of dutiable and exempted final products and has neither maintained separate accounts nor paid an amount equal to 5%/10% on the value of clearances of exempted final products in terms of Rule 6(3)(i) of the Cenvat Credit Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t credit on the inputs used in the manufacture of goods cleared under Notification No. 63/95-CE, at the time of clearance from the factory. However, the assessees have not submitted any documents or evidences to show that they have paid Cenvat credit attributable to the Cenvat availed inputs and input services, during the relevant period. From their submissions, it appears that they have paid proportionate credit relating to only inputs but no input services, whereas provisions of Rule 6(3)(a)(vii) of Cenvat Credit Rules, 2004 requires payment of amount equal to Cenvat credit attributable to input services also. Further, in their additional submissions dated 12.03.2013, they have enclosed a sample calculation sheet showing proportionate reversal of cenvat credit on inputs contained in final products cleared to Defence during September 2011. On perusal of the same, it is seen that the assessees have not paid an amount equivalent to the Cenvat credit attributable to input services used in, or in relation to the manufacture of exempted goods. Therefore, I hold that the assessees have not complied with the conditions of Rule 6(3)(a)(vii) of Cenvat Credit Rules, 2004 and hence are requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total price, excluding sales tax and other taxes, if any, paid on such goods, of the exempted final product charged by the manufacturer for the sale of such goods at the time of their clearance from the factory;" 7A.1.1 The appellant, here argues that when they have paid proportionate credit on input/input services, the provisions of Rule 6(3)(b) asking for payment of an amount equal to 10% of the total price, excluding sales tax and other taxes, will not be applicable. 7A.1.2 The appellant states that there is no dispute regarding reversal of proportionate credit on the input goods; at the most, if there is any doubt regarding the proportionate reversal of credit on input services, the demand has to be restricted only to the proportionate credit on input services. 7A.1.3 The appellant also argues that this demand is barred by limitation as there has not been any malafide intention on the part of the appellant for non-payment and non-reversal of the said demand of Cenvat credit. 7A.2 After careful consideration of the above facts and the submissions of the Department and the appellant, it is clear that this demand could theoretically be restricted only to the proportionate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the option for maintaining separate account for inputs and for reversal of proportionate credit of input services. The appellant states that they have reversed the Cenvat credit of input services for the period of 2010-11, 2011-12, 2012-13 and it is claimed by the appellant that proof of such reversal of Cenvat credit has been produced. The appellant further argues that the demand for the period prior to July 2011 is barred by limitation. 7B.2 After careful consideration of the facts on record and the submissions of both the sides, we find that though the appellant claims that they reversed Cenvat credit on account of input services, the Revenue has not got such proof of reversal of Cenvat credit on input services. It is, therefore, held that in order to get the benefit on the subject payment/reversal of credit, a clear cut proof evidencing reversal of Cenvat credit of inputs has to be produced by the appellant before the Revenue. In case of this demand , we find that the plea of time-bar, where-under the appellant says that the demand for the period prior to July 2011 is barred by limitation is a valid argument as there has not been any clear cut proof available to substantiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, unless the Revenue is able to prove fraud or collusion or any willful mis-statement or suppression of facts or contravention of any provisions of laws of Central Excise and/or Service Tax with an intention to evade payment of duty on the part of the appellant. 7C3.1 We do not find any clear cut evidence that there has been any kind of fraud or collusion or willful mis-statement or suppression of facts or contravention of any provisions of laws concerning Central Excise and/or Service Tax on the part of the appellant with an intention to evade payment of duty. Therefore, this demand of ₹ 4,25,000/- is clearly barred by time limitation and is hereby set aside. 8. From the above discussions and analyses, it is evident that as per para 7A.2.1 above the demand of ₹ 13,78,91,547/- has been held as barred by time limitation as per the provisions of Section 11A(4) of Central Excise Act, 1944. 8.1 In case of demand of ₹ 35,88,72,223/- confirmed by the impugned order, we find and order that as per pare 7B.2 above, this demand survives only for the normal period of one year from the relevant date. The demand beyond the normal period of one year is barred from recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X
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