2003 (9) TMI 584 - AT - Central Excise

Summary

Issues:
- Challenge to order passed by Commissioner of Central Excise
- Denial of deemed credit taken by appellant
- Barred by limitation contention
- Availing deemed credit on aluminium ingots
- Submission of necessary declarations for Modvat credit
- Rejection of contentions by Commissioner
- Allegation of suppression of fact
- Justification for invocation of larger period of limitation

Analysis:
1. The appellant challenged the order passed by the Commissioner of Central Excise, Ahmedabad, dated 29-9-1997, regarding the denial of deemed credit taken by the appellant for the period 6-6-1988 to 20-5-1991. The appellant contended that the demand was barred by limitation, as there was no suppression of fact to evade duty intentionally.

2. The appellant, engaged in the manufacture of textile machinery, purchased aluminium alloys/ingots from a supplier and availed deemed credit on them. The appellant maintained proper records, including Modvat registers and monthly returns, disclosing transactions with the supplier. Despite contentions raised by the appellant, the Commissioner rejected the claim, alleging suppression of fact with intent to evade duty, justifying the invocation of a larger period of limitation.

3. The appellant argued that all necessary declarations for Modvat credit were filed, and relevant documents were submitted to the department. However, the Commissioner rejected these contentions, emphasizing the absence of purchase invoices for the aluminium ingots purchased from the supplier. The Commissioner alleged that the appellant was aware that the supplier cleared goods under exemption, disqualifying them from deemed Modvat credit.

4. The appellant contended that there was no suppression of fact, as all relevant documents were provided to the department. The appellant's failure to inquire about the duty payment on supplied ingots did not amount to intentional evasion of duty. The Tribunal found merit in the appellant's argument, stating that the Revenue failed to provide supporting material for invoking the extended period of limitation. Consequently, the Tribunal set aside the Commissioner's order, allowing the appeal.

5. The Tribunal held that the appellant had not suppressed any material fact and had complied with the necessary documentation requirements. The appellant's lack of further inquiry with the supplier did not constitute intentional evasion of duty. The Tribunal emphasized that the department was aware of the transaction nature, absolving the appellant of any intentional suppression of fact.