2019 (12) TMI 175 - AT - Central Excise

Recovery of excess availed CENVAT Credit - sister concern of the appellant unit had raised the invoice for clearance of 4950 kgs of the input viz., ‘Desmodur-MDI’ as such out of the total quantity of 15750 kgs imported - proportionate credit was required to be availed - time limitation - revenue neutrality - HELD THAT:- Due to bona fide mistake appellant has availed entire credit of ₹ 8,63,199/- on the basis of invoices issued by the sister concern. Further, the sister concern has reversed the entire credit of ₹ 8,63,199/- and the same has been availed by the appellant and both the appellant and the sister concern are engaged in the production of identical goods and therefore, it is not the case of the Revenue that both the units have availed the CENVAT credit. It is a situation of revenue neutral because whatever credit has been passed on by the sister concern has been availed by the appellant and in such a situation, it is a settled law that when it is a revenue neutral situation, suppression of facts and mis-declaration cannot be alleged as there is no revenue loss to the Government and no unjust gain to the appellant.

Time Limitation - HELD THAT:- Entire demand is also barred by limitation because the show-cause notice was issued in 2017 for the period of September 2013 and there is no willful suppression of facts with intention to evade payment of duty - the impugned order demanding reversal of CENVAT credit is not sustainable on merit as well as on limitation.

Appeal allowed - decided in favor of appellant.