9911796707
TMI Blog2025 (2) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1,81,11,167/- was denied to the appellant for the period March 2016 to June 2017 and an equal amount was imposed as penalty on the appellant. 2. The appellant manufactures polyester film and avails Cenvat credit on the input services and capital goods. During audit, it was found that the appellant had wrongly availed Cenvat credit amounting to Rs. 1,81,11,167/- during the period March 2016 to June 2017. A show cause notice SCN dated 16.02.2021 was issued invoking extended period of limitation and also proposing to impose an equal amount of penalty. The reason for invoking extended period of limitation given in the show cause notice is as follows :- "7 (vi) However, it appears that the act of wrong availment of Cenvat credit committed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontravention of any of the provisions of the Excise Act, or of the rules made thereunder with intent to evade payment of duty, then, the manufacturer shall also be liable to pay penalty under section 11AC. Further, it is also pertinent to mention here that the fact of wrong availment of Cenvat credit committed by the party, without observing the provisions of relevant sections of the Central Excise Act, 1944 and Rules made thereunder, was with sole intention to evade payment of Central excise Duty. The said irregularities of the party came to notice of the department only during the course of Audit conducted by the department. This irregularity on the part of the party could not have been unearthed if the audit of the party was not undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall apply mutatis mutandis for effecting such recoveries; (ii) Where the CENVAT credit has been taken and utilised wrongly or has been erroneously refunded, the same shall be recovered along with interest from the manufacturer or the provider of output service, as the case may be, and the provisions of sections 11A and 11AA of the Excise Act or sections 73 and 75 of the Finance Act, 1994, as the case may be, shall apply mutatis mutandis for effecting such recoveries". The instant case being related to proceedings for recovery of wrongly availed Cenvat credit availed by the manufacturer of excisable goods. Therefore, the limitation period as prescribed under section 11A of Central Excise Act, 1944 is applicable in the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt show cause notice has been issued on 16.02.2021 demanding Cenvat credit taken during the period March 2016 to June 2017. The ER-1 return for the period June 2017 was filed on 10.07.2017. therefore the relevant date for the purpose of demand of duty would start from the date of filing of SR-1 return. Accordingly, the limitation period of two years as laid down under section 11A of Central Excise Act, 1944 was expired on 10.07.2019. Hence, the entire demand is not enforceable being time barred". 5. The Commissioner (Appeals), in his order, recorded as follows :- "10.5 As regards to penalty imposed up on the appellant and the time limitation aspect, the appellant have submitted that as they have filed all their returns well within the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above is that the only reason given in the order for confirming the duty demanded for the extended period of limitation and penalty is that the alleged wrong availment of Cenvat credit came to notice during the audit. This is not one of the grounds on which extended period of limitation can be invoked. There is no allegation that the appellant had not been filing its returns. When returns are filed, it is for the officers to scrutinize them and if necessary, call for additional information and raise demands. The fact that the alleged wrong availment was discovered during audit only means that the officer responsible to scrutinise the returns had not done his job. Otherwise, what was discovered by the audit could have as well been discovered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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