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TMI Blog2024 (6) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... period of five years in view of the proviso to Section 11A of the Act, the Revenue is obliged to establish by cogent evidence that the duty of excise has not been levied or paid or short-levied or short-paid or erroneously refunded by reasons of either fraud or collusion or wilful mis-statement or suppression of facts or contravention of any provision of the Act or rules made thereunder, with intent to evade payment of duty. As the demand has been made invoking extended period of limitation and it is not found that the same is available to Revenue for making this demand. The impugned order cannot be sustained on this ground itself. Denial of CENVAT Credit - HELD THAT:- As the demand is barred by limitation, the question of admissibility of credits on merits not discussed. Appeal allowed. - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Ms. Usmeet Kaur Monga, Advocate for the Appellant Shri A. K. Choudhary, Authorized Representative for the Respondent ORDER This appeal is directed against Order-in-Appeal No.NOI-EXCUS-001-APP-924-2020-21 dated 27.01.2021 passed by Commissioner (Appeals) CGST, Noida. By the impugned order Commissioner (Appeals) has held as follows:- 13. As far as plea of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the party. ii. I confirm the demand of interest as applicable rate in terms of Rule 14 of CENVAT Credit Rules, 2004 read with 11AA of Central Excise Act, 1944. iii. I also impose an equal penalty under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944 for contravention of various provisions of Central Excise Act, 1944 and Central Excise Rules, made there under and discussed supra. The dues so adjudged to be paid forthwith. 2.5 Aggrieved Appellant filed appeal before learned Commissioner (Appeals) which has been dismissed as per the impugned order. Hence this appeal. 3.1 I have heard Ms. Usmeet Kaur Monga, Advocate appearing on behalf of the Appellant and Shri A. K. Choudhary, Authorized Representative for the Revenue. 3.2 Arguing for the Appellant learned counsel submits that: the issue to be determined in the present case are,- Whether the department can invoke extended period of limitation on ground of suppression of fact even though all the required information was timely provided by the appellant? Can Cenvat credit for input services be denied under Rule 2(l) which are taken in relation to manufacturing clearance of final products? appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the definition of input services as per Rule 2 (l). Reliance is placed on the decision in Manaksia Coated Metals Industries Ltd., [2013 (12) G.S.T.L. 90 (Tri.-Ahmd.)]. 3.3 Learned Authorized Representative reiterates the findings recorded in the impugned order. 4.1 I have considered the impugned order alongwith the submissions made in the appeal and during the course of arguments. 4.2 The relevant extract of the ER-1 Return filed by the Appellant for the period March, 2014 is reproduced below:- 5. DETAILS OF CENVAT CREDIT TAKEN AND UTILIZED Details of Credit CENVAT AED_TTA NCCD ADE_LV D_CL_85 ADC_LV D_CT_75 EDU_CE SS SEC_ED U_CESS SER-VICE_TAX EDU_CE SS_ST SEC_ED U_CESS_ST Opening Balance (Rs.) 763584 0 0 0 0 52582 26214 0 0 0 Credit Taken on inputs on invoices issued by manufacturers(Rs.) 4539725 0 0 0 0 90750 45396 0 0 0 Credit Taken on inputs on invoices issued by I or II stage dealers (RS.) 0 0 0 0 0 0 0 0 0 0 Credit Taken on inputs on imported inputs (Rs.) 1731621 0 0 0 0 0 0 0 0 0 Credit Taken on Capital Goods on Invoices issued by Manufacturers or By I Or II Stage Dealers (Rs.) 7901 0 0 0 0 160 81 0 0 0 Credit Taken on imported capital goods (Rs.) 0 0 0 0 0 0 0 0 0 0 Cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppression of fact is untenable as the Act contemplates a positive action which betrays a negative intent of wilful default. Further, in Pushpam Pharmaceuticals Co. v. CCE [1995 (75) ELT 721 (SC)] it was held that misstatement or suppression of fact must be wilful since the word wilful precedes the words misstatement or suppression of fact which means with an intent to evade duty. Bearing in mind the above legal principle, if we examine the allegations in the show cause notice dated 17th October, 2016, we find that there is no specific allegation or prima facie finding of any wilful misstatement or suppression on the part of the assessee. That apart, the details have been culled out by the adjudicating authority from the available records and there is no new or fresh tangible materials available in the hands of the adjudicating authority to make out a case of wilful misstatement or wilful suppression. Therefore, the Tribunal was fully justified in holding that the extended period of limitation could not have been invoked. 4.6 In case of Meghmani Dyes Intermediates Ltd.(supra) has held as follows:- 37 . The judgment of the Supreme Court in the case of Chemphar Drugs and Liniments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, is a question of fact to be established in each case. 39 . In the case of Commissioner of Central Excise, Aurangabad (supra), the Supreme Court once again considered Section 11A and held in paragraph 12 as under: Section 11A of the Act empowers the central excise officer to initiate proceedings where duty has not been levied or short-levied within six months from the relevant date. But the proviso to Section 11A(1), provides an extended period of limitation provided the duty is not levied or paid or which has been short-levied or short-paid or erroneously refunded, if there is fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty. The extended period so provided is of five years instead of six months. Since the proviso extends the period of limitation from six months to five years, it needs to be construed strictly. The initial b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals lie under Section 35 of the Central Excise Act to the Commissioner (Appeals) and, thereafter, a second appeal to the CEGAT under Section 35B. It may be noted that the second appeal to the CEGAT is not like a second appeal under Section 100 C.P.C., since it is not confined to questions of law. Second appeals under different statutes can have different meanings and different scope. A second appeal under Section 35B of the Central Excise Act is like a first appeal under Section 96 C.P.C. inasmuch as findings of fact can also be gone into and the CEGAT can re-appreciate or reassess the evidence. Thus the orders of the Assistant Commissioner and the Commissioner (Appeals) merge into the order of the CEGAT by the doctrine of merger, and the only order which now survives is the order of CEGAT. Hence the reference to the orders of the Assistant Commissioner and the Commissioner (Appeals) is wholly misconceived, as these orders no longer survive after the order of the CEGAT. The CEGAT has recorded a clear finding of fact that there is no suppression, and hence, obviously, the demand was time-barred since the larger period of limitation under the proviso to Section 11A is not applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in proviso to Section 11A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to the CEGAT to come to a conclusion that the appellant was guilty of suppression of facts . In Densons Pultretaknik v. Collector of Central Excise [2003 (11) SCC 390], this Court held that mere classification under a different sub-heading by the manufacturer cannot be said to be willful mis-statement or suppression of facts . This view was also reiterated by this Court in Collector of Central Excise, Baroda v. LMP Precision Engg. Co. Ltd. [2004 (9) SCC 703]. 4.12 Hon ble Supreme Court in the case of Continental Foundation Jt Venture [2007 (216) ELT 177 (SC)] held as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that there was no suppression of fact or wilful misstatement on the part of the assessee and no ground was, therefore, available for invoking the extended period of limitation. In addition, the Tribunal observed that in the present case, the situation was revenue neutral since, in the facts of the case, the entire duty paid by the assessee in respect of the clearances of MS tanks and radiators to its transformer unit was available to the transformer unit as Cenvat credit. In other words, the Cenvat credit was available not to a third party buyer of the assessee s manufactured goods but to the assessee itself in its transformer unit. Since the situation was revenue neutral, this was an additional ground which weighed with the Tribunal to hold that the extended period could not be invoked. 6 . Having considered the judgment of the Tribunal, we see no reason to interfere with the finding of fact that if a scrutiny had been made by the Range Officer of the ER-1 returns, that would have revealed that the assessee had cleared its MS tanks and radiators to the owning company for the manufacture of transformers. This indicated that there was no fraud, collusion, misstatement or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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