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2019 (8) TMI 1834 - AT - Central ExciseDenial of CENVAT Credit - Furnace Oil used in the process undertaken for obtaining fuel oil - the process of ‘mixing and blending’ is misdeclared as manufacture of ‘fuel oil’ - Rule 14 of CENVAT Credit Rules 2004 read with section 11A of Central Excise Act, 1944, alongwith applicable interest and equivalent penalty - suppression of facts or not - invocation of extended period of limitation - HELD THAT:- The assessee had duly informed the department about manufacture of the goods, namely ‘Fuel Oil’ and that the appellant shall avail cenvat credit against such inputs to be utilised for manufacture of Fuel Oil. Therefore,the fact regarding availment of duty credit on furnace oil was always in the knowledge of the department. This clearly shows that there was no mala fide intention on the part of the appellant to misuse the benefit of Cenvat Credit as wrongly observed by the Ld. Commissioner. The assessee has duly shown the availment of credit in ER-1 returns which fact is not in dispute. The Tribunal in COMMISSIONER OF CENTRAL EXCISE, KOLKATA VI VERSUS M/S ITC LTD. [2013 (3) TMI 44 - CESTAT KOLKATA] has observed that if the assessee has disclosed availment of CENVAT Credit in ER-1 returns, suppression of facts cannot be alleged and demand beyond normal period is not sustainable. Thus, the impugned SCN dated 23.02.2012 issued by invoking extended period of limitation for duty demand for the period February 2007 to March 2008 is hopelessly barred by limitation. On merits also, there are force in the submission of the appellant that even if it is assumed that the process undertaken by the appellant did not amount to manufacture, the question of levy of duty on the final product did not arise and therefore, no duty demand is sustainable otherwise also. The Ld. Commissioner in his order, did not follow the Gujarat High Court’s decision in COMMISSIONER OF CENTRAL EX. & CUS., SURAT-III VERSUS CREATIVE ENTERPRISES [2008 (7) TMI 311 - GUJARAT HIGH COURT] for the only reason that in similar circumstances, the Department has filed an appeal before the Hon’ble Bombay High Court against the Tribunal’s decision in NRB BEARINGS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II [2006 (10) TMI 74 - CESTAT, MUMBAI]. The stand taken by the Ld. Commissioner, cannot be agreed upon for the reason that the appeal filed by Department has merely been admitted for hearing and that the decision of the Tribunal as reported in NRB BEARINGS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II [2006 (10) TMI 74 - CESTAT, MUMBAI], has not been stayed and will accordingly hold good. The Ld. Commissioner committed a fundamental error in not following the Hon’ble Gujarat High Court’s decision which has been duly upheld by the Apex Court. The appellant is legally entitled to avail Cenvat Credit - the impugned order cannot sustain both on merits as well as on limitation - Appeal allowed - decided in favor of appellant.
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