2022 (11) TMI 148 - AT - Central Excise
Utilization of Cenvat Credit of basic Excise Duty for discharge of E Cess and SHE Cess - suppression of facts or not - Extended period of limitation - HELD THAT:- There can be no doubt that the purported demands against the appellant could have been confirmed only if the invocation of extended period of limitation was proven to be legal and justified. Upon perusal of the show cause notice dated 19.02.2015 it is clear that no allegation had been framed that the appellant had suppressed material facts from the Department or that the appellant had committed any specific default warranting invocation of the extended period of limitation. Thus, the appellant was never put to notice as to which of the various acts or omissions mentioned in the proviso to Section 11A(1) of the Act had been committed by it - thus, the invocation of extended period of limitation was totally contrary to law.
The assessee could not have been faulted for its conduct, even if it were to be held that cross utilization of basic Excise Duty credit for payment of E Cess and SHE Cess was prohibited under the Rules. In the case of M/s Madura Industrial Textiles, supra, the Hon’ble Gujarat High Court had considered the issue and ruled in favour of the assessee.
The evidences on record do not show that the appellant had acted otherwise than in a bona fide manner. It is not disputed that the details regarding availment and utilization of the disputed credit had been disclosed in the appellant’s Central Excise returns filed with the Department. The issue of purported illegal utilization of credit had come to the Department’s knowledge as far back as in the year 2013 while conducting audit - there are no reason to sustain the invocation of extended period of limitation against the appellant.
It is held that the purported disallowance of Cenvat Credit of Rs. 9,08,676/- against the appellant is illegal and unjustified. The confirmation of interest and equivalent penalty under Section 11AB/AA of the Act and Rule 15 of the Rules respectively is also held as unsustainable - Appeal is disposed of on the point of limitation.