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TMI Blog2025 (3) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants agreed upon that such an inclusive deeming fiction has been incorporated under Section 66A of the Finance Act, 1994. It is found that in the impugned case, Rule 16 does not provide such applicability to the other Rules of CENVAT Credit Rules. It can be seen that Rule 16 brings in one such deeming fiction to cater the exigencies of the manufacturers who are likely to receive back final products for repair, re-conditioning etc. As the duty on the same has been discharged, legislature in their wisdom has permitted availment of CENVAT credit on the same. For this reason, the goods cannot be equated to be inputs for the purpose of Rule 3 of CENVAT Credit Rules as they were never been inputs - the findings of the impugned order are not sustainable on this count. The appellant has correctly not included the amount of CENVAT credit in the value of inputs for the purpose of reversal of CENVAT credit in terms of Rule 6(3A) in respect of exempted and dutiable goods manufactured by them. Invocation of extended period of limitation - penalties - HELD THAT:- Department has not made out any case for invocation of extended period. Moreover, it is seen that extended period have been invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the proportionate credit to be reversed as per Rule 6(3A) of CENVAT Credit Rules, 2004. Accordingly, show cause notices dated 30.05.2016, 26.04.2017, 26.04.2018 & 23.04.2019 were issued to the appellants, covering the period April 2012 to June 2017, demanding amount of Rs.6,45,94,620/-; Rs.3,65,40,409/-; Rs.2,60,98,650/- & Rs. 58,71,773/- respectively. The show cause notices were confirmed along with interest and equal penalty vide Orders-in-Original dated 28.02.2017, 27.10.2017, 24.10.2018 and 12.11.2020. Hence, these appeals E/60455/2017, E/60148/2018, E/60116/2019 & E/60120/2021. 2. Shri B. L. Narsimhan, learned Counsel for the appellants, submits that credit on Interface is availed in terms of Rule 16 of the Central Excise Rules and thus, Rule 6 of CENVAT Credit Rules is not applicable; Rule 16 is a special Rule which caters to a particular contingency by a deeming fiction; the applicability of Rule 16 is only to the extent of permitting availment of goods brought to the factory for re-conditioning, refining etc; the deeming fiction does not extend to other CENVAT Credit Rules; the Rule cannot be extended beyond the purposes for which the deeming fiction has been created. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any positive act of the appellant with intent to evade tax; therefore, the extended period cannot be invoked; Revenue was aware of the activities of the appellants and the show cause notice for the period 2012-15 was issued invoking extended period. Extended period was also invoked in the subsequent show cause notices which are not permissible; moreover, the appellant is a Public Sector Undertaking and as held in their own case, extended period cannot be invoked. He relies on the following cases: * International Merchandising Company, LIC Vs. Commissioner of Service Tax, New Delhi 2022 (67) G.S.T.L. 129 (S.C.) * Delhi Airport Metro Express Pvt. Ltd. versus Commissioner of Central Excise & Customs Final Order No. 50031/2024 dated 11.01.2024 * Maruti Suzuki India Ltd. Versus Commissioner Of Central Goods & Service Tax, Gurugram in Final Order No. 60414-60415/2024 dated 01.04.2024 * The Commissioner, Central Excise and Customs and Another vs. M/S Reliance Industries Ltd. And Commissioner of Central Excise and Service Tax Vs. M/S Reliance Industries Ltd. [2023-TIOL-94- SC-CX] * Principal Commissioner Of CGST, Delhi North Vs. M/S Oriental Insurance Company Ltd Final Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e all those facts and consequences which are incidental or inevitable corollaries to the giving effect to the fiction. But in so construing the fiction it is not to be extended beyond the purpose for which it is created, or beyond the language of the section by which it is created. It cannot also be extended by importing another fiction. ---- The question here is one of interpretation only and that interpretation must be based on the terms of the section. The fiction enacted by the legislature must be restricted by the plain terms of the statute. " --- "The fiction is an indivisible one. It cannot be enlarged by importing another fiction..." 7. We also find that Hon'ble Supreme Court has held in the case of Imagic Creative Pvt. Ltd. (supra) that: 26. We have noticed hereinbefore that a legal fiction is created by reason of the said provision. Such a legal fiction, as is well known, should be applied only to the extent for which it was enacted. It, although must be given its full effect but the same would not mean that it should be applied beyond a point which was not contemplated by the legislature or which would lead to an anomaly or absurdity. 8. We further find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en rendered were made----- 10. The unmissable proposition of the above cases cited is that a deeming fiction should be understood and constructed for the purposes it is intended. We find that if Rule 16 of the CENVAT Credit Rules 2004 provides for availing credit on goods brought into the factory for whatever purpose, it should be interpreted in a constricting manner without expanding the purposes for which a deeming fiction has been brought in. We find that wherever legislature intended to make the deeming fiction applicable to the entirety of Rules, the same is provided by the Rule itself. We are in agreement with the submissions of the learned Counsel for the appellants that such an inclusive deeming fiction has been incorporated under Section 66A of the Finance Act, 1994. We find that Rule 66A (1) provides for deeming provisions separately which are applicable for the purposes of the Section therein and which are not applicable for the purpose of that Section as can be seen below: 66A. (1) Where any service specified in clause (105) of section 65 is- (a) provided or to be provided by a person who has established a business or has a fixed establishment from which the servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, we find that the findings of the impugned order are not sustainable on this count. We find that the appellant has correctly not included the amount of CENVAT credit in the value of inputs for the purpose of reversal of CENVAT credit in terms of Rule 6(3A) in respect of exempted and dutiable goods manufactured by them. 12. We also find that series of show cause notices have been issued invoking extended period and proposing to levy equal penalty. Looking into the facts of the case wherein no evidence, whatsoever, has been brought forth by the Revenue to allege suppression of facts etc. with intent to evade payment of duty on the part of the appellant, we are of the considered opinion that Department has not made out any case for invocation of extended period. Moreover, it is seen that extended period have been invoked in the subsequent show cause notices also in contravention of the Hon'ble Supreme Court's decision in the case of Nizam Sugar Factory Ltd. (supra), we find that extended period cannot be invoked in the subsequent show cause notices. Further, as the appellants being subjected to audits from time to time and keeping in view that the appellants are a Public Sector U ..... X X X X Extracts X X X X X X X X Extracts X X X X
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