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TMI Blog2018 (4) TMI 1673X X X X Extracts X X X X X X X X Extracts X X X X ..... 127 - SUPREME COURT OF INDIA]. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Further if Sub-section (3) and (4) are read together, all that emerges is that prior to 01/04/2000. Cenvat credit taken in respect of AED - GSI was not allowed to be utilized towards payment of Basic Excise Duty (BED) and Special Excise Duty (SED). Further, there appeared no bar on utilization of credit of AED - GSI towards payment of AED - GSI at any point of time and the recovery of Cenvat credit contemplated in Sub-section (4) of Section 88 of the Finance Act, 2004 relates to that amount of credit which had been utilized by the assessee towards payment of duty other than AED - GSI. It further appeared that the appellant-assessee would not be allowed to utilize the Cenvat credit in respect of AED - GSI prior to 01/04/2000 towards payment of BED and SED or any duty other than AED - GSI. 2. The following three Show Cause Notices have been adjudicated, vide the impugned Order-in-Original, which is as follows:- "(i) Show Cause Notice dated 11.01.2005 for the period 16.03.1995 to 31.03.2000 seeking to question the very taking of the Credit of Additional Duty of Excise (goods of Special Importance) [AED (GSI] leviable under Additional Duty of Excise (Goods of Special Importance) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how Cause Notice dated 04.01.1999 at S. No. (iii) above, the Commissioner by its common impugned Order has dropped the demand against the Assessee as being wholly time barred by holding that extended period of limitation could not have been invoked in the facts and circumstances of the said Show Cause Notice. The Department has filed its Appeal only against dropping of aforesaid Show Cause Notice. Submissions Re: Show Cause Notice dated 11.01.2005 Sr. No. (i) - seeking to question taking of Credit of AED (GSI) 3.4 At the outset, the Counsel for Appellant submits that in relation to Show Cause Notice dated 11.01.2005, the Adjudicating Authority has rightly held that the Appellant was entitled to take credit of the AED (GSI) and therefore rightly held that, no fault can be found with the Appellant's taking of credit of AED (GSI) in the present case. 3.5 However, the Adjudicating Authority erred in making the qualifying remark to the effect that the said credit of AED (GSI) rightly taken by the Appellant "allowed to be utilized for the purpose of payment of AED (GSI) only and disallowed towards payment of any other duty." Similar observations made elsewhere in the body of the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the first day of March, 1997." c) The Department objected to aforesaid utilization and took a stand that credit of AED (GSI) can be used for payment of AED (GSI) only and cannot be used for payment of any other duty. d) This controversy was settled in favour of the appellant by the Principal Bench of this Hon'ble Tribunal vide its decision dated 30.03.2000 reported in 2000 (126) ELT 1222. Vide its Aforesaid decision, this Hon'ble Tribunal held that credit of AED (GSI) can be used for payment of BED on any other final product as per Proviso to Rule 57F(12). e) The aforesaid decision of the Hon'ble Tribunal was thereafter challenged by the Department in Central Excise Reference No. 2 of 2009 before the Hon'ble Allahabad High Court. The Hon'ble Allahabad High Court has answered the said reference in favour If the Assessee and against the Revenue vide its Order dated 19.12.2016 reported in 2017 (348) ELT 259 (All.) (copy of the unreported High Court decision handed over at the time of hearing). f) It may be clarified that with effect from 01.04.2000 Rules 57A to 57U were substituted by Rule 57AB and Rule 57AB(1)(b) specifically amending the law by replacing the words 'any final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard. This has also been challenged by the Appellant in Assessee's Appeal. 3.13 At this juncture it is pertinent to note that even the issues regarding to dutiability and classification of DTCF have also been an industry-wide issue. With regard to the dutiability and classification of DTCF, the dispute had reached the Hon'ble Supreme Court and the Hon'ble Supreme Court in the case of MRF Ltd. vide its decision reported in 2000 (180) ELT 145 (SC) had remanded the matter back to the Adjudicating Authority therein for a de-novo consideration. While remanding the matter back, the Hon'ble Supreme Court took cognizance of the fact that the issue of classification of DTCF was earlier decided in a manner by which no AED (GSI) would have been payable. 3.14 In the present case, the Commissioner himself records that the issue involved in matter was widely in dispute and had reached upto the level of the Hon'ble Supreme Court. In fact the Commissioner specifically records that disputed classification was not very clear both to the Assessee as well as to the Department. He further records that he would qualify the present case under the category of disputes arising due to interpretatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Commissioner have rightly placed reliance on the ruling of Hon'ble Supreme Court in the case of Nizam Sugar Factory (supra), which according to him is squarely applicable in the facts of the present case. The ruling in the case of Nizam Sugar Factory is not applicable in the facts of the present case which are entirely different. In Nizam Sugar Factory, a SCN dated 28/02/1994 was issued demanding duty for the period February, 1978 to September, 1982. Thereafter, subsequent SCN dated 16/07/1987 for the period 1982-83 to 1986-87 and the third SCN dated 12/09/1988 for the period 16/03/1988 to 27/06/1988 was issued on the assessee. Thus, Hon'ble Supreme Court held that when the first SCN was issued, all the relevant facts were in the knowledge of the authorities. Later, while issuing the second and third SCN the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts are already within the knowledge of the authorities. Whereas, in the present case, a demand for the normal period covering the six months period pertaining to January, 1998 to 1st June, 1998 was issued by the Divisional Assistant Commissioner, in terms of Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 173G( 2) regarding issuance of invoices under Rule 52A for removal of dipped nylon cord fabrics on payment of duty prior to it being brought in captive use for the manufacture of tyres. (e) They failed to maintain a daily stock of dipped nylon cord fabrics in terms of Rule 47 of CER, 1944 regarding manufacture and issuance for the purpose of manufacture. (f) They failed to maintain the aforementioned records and failed to follow the procedure with an intent to evade payment of AED (GSI) leviable on dipped nylon cord fabric. (g) They failed to furnish the information sought by the Department regarding the quantity and value of dipped nylon cord fabric for the period 16.03.1995 to December, 1997 and it was only on 04.08.1998 when the requisite information was made available by them vide their letter dated 04.08.1998 for normal period of demand in terms of Section 11A. (h) They party, thus, not only suppressed the material facts from the department but also deliberately tried to withhold the submission of information/data sought by the department. It was only after the continuous efforts of the department to extract the relevant information/data from the party, the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y rejected by the Hon'ble Supreme Court in the case of Nizam Sugar Factory. In this view of the matter, it is submitted that Adjudicating Authority has rightly set aside the demand as being time barred, particularly when the Show Cause in relation to the identical issue for the subsequent period was issued about 5 months prior to the issuance of the Show Cause Notice dated 04.01.1999. 5.4 In addition to above, it is submitted that the Adjudicating Authority has noted the specific knowledge of the Department way back on 10.07.1996 and the visit by the Department on 08.03.1997 and the proceedings of the Department on 05.09.1997 ruling out any suppression. 5.5 Further, it is submitted that in identical facts and circumstances, in Appellant's competitor's case, this Hon'ble Tribunal by its decision in the case of CEAT Limited Vs. CCE Mumbai-III - 2008 (232) ELT 260 has held that no penalty can be imposed in the circumstances of the present nature. 5.6 For this purpose, this Hon'ble Tribunal relied upon the Hon'ble Supreme Court dection in the case of CCE Trichy Vs. Grasim Industries Limited - 2005 (183) ELT 123 (SC), wherein the Hon'ble Supreme Court in para 20 held that no mens re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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