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2016 (3) TMI 161 - AT - Central ExciseCenvat credit on AED (T&TA) for payment of basic excise duty on clearance of the final product from the factory - whether appellant had intentionally utilized the AED (T & TA) for payment of basic excise duty, knowing fully well that such utilization is prohibited under Rule 3 (6) (b) of the Cenvat Credit Rules, 2002? - initiation of proceedings for recovery of wrongly availed cenvat demand alongwith interest and imposition of equal amount of penalty by invoking the extended period of limitation - Held that:- Taking of cenvat credit of AED (T&TA) and utilization towards payment of BED is not attributable to fraud, collusion or any willful misstatement with intent to evade payment of Central Excise Duty, for the reason that the appellant had maintained proper records showing availment and utilization of cenvat credit on such disputed duty. Therefore, in absence of those ingredients, issuance of show cause notice should be confined to a period of one year from the date of utilization of such wrongly availed credit. It is not in dispute that the appellant has not complied with the statutory provisions in not filing the returns in time and that the credit particulars were not reflected therein. Since, the information regarding taking of cenvat credit on the disputed duty amount and utilization thereof for clearance of the finished products was within the knowledge of the Department, the show cause notice issued on 04.03.2008, proposing recovery of cenvat credit for the period April 2003 to July, 2004,is barred by limitation of time. See KG DENIM LTD. Versus COMMISSIONER OF CENTRAL EXCISE [2007 (10) TMI 95 - CESTAT, CHENNAI ] Therefore, proceeding initiated by Department for recovery of wrongly availed cenvat credit alongwith interest and imposition of penalty by invoking the extended period of limitation is not justified. - Decided in favour of assessee
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