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2024 (7) TMI 265 - AT - Central ExciseCaptive exemption - Fatty Acid Pitch (FAP) - Benefit of N/N. 67/95-CE dt.16.03.1995 - FAP emerging as an intermediate product but otherwise excisable in the factory of the Appellants - manufacturing both dutiable goods as well as non-dutiable goods - Rule 6(3A) of Cenvat Credit Rules - extended period of limitation. HELD THAT - The Adjudicating Authority has made certain conclusions based on the purported observations made by the Audit team as regards the factual position of presence of boilers and there having no clear cut demarcation for its use in the manufacture of dutiable and exempted products. The SCN is referring to some observations of Audit team without referring to any Audit memo or report based on any factual verification done by the Audit team or subsequently by the Department and is merely relying upon two letters from the Appellants themselves. The Adjudicating Authority has presumed that the Appellants have not been able to bring any evidence to the effect as to from where they were getting steam for the manufacture of exempted goods and because of that it was reasonably postulated by him that FAP was used as fuel in one of the boilers which in turn produces steam and which in turn was used in the manufacture of certain exempted final goods. Despite the Appellants making repeated claims about the FAP not being used for any exempted goods and furnishing all the relevant details to the Department no further enquiry or investigations were carried out to crosscheck as to whether Appellant s assertions were correct or otherwise. In fact they have gone a step further by invoking the extended period also even though there is no evidence on record to establish that the FAP has been used for manufacture of exempted product and that it was done deliberately and intentionally to evade payment of duty. In fact the Appellants themselves have informed the Department about their intended use way back in 2007 itself and till the issue of SCN in 2012 no verification was carried out to prove to the contrary by the Department. There is no cogent verifiable evidence on the record to suggest that FAP was used in the manufacture of exempted products also and therefore liable to duty by denying the benefit of N/N. 67/95-CE. - In the absence of any categorical evidence from the Department to the effect that steam generated by FAP through the boiler was used in the manufacture of any of the exempted products the conclusions drawn by the Adjudicating Authority in the impugned order is not legally tenable. Merely because they could not adduce evidence as to where they got steam for exempted product it cannot lead to conclusion that FAP was used in boiler and steam so generated was used for manufacture of such products. In the absence of any detailed inquiry/investigation rebutting the factual assertions of the Appellant Department could not have relied inherently on letters sent by Appellant themselves and some vague observations of Audit team Report of which has not been even relied upon in SCN. Extended period of limitation - HELD THAT - There is sufficient evidence on record that Appellants have not tried to hide anything from the Department and in fact were furnishing all the relevant information as required by the Department from time to time and in fact making categorical assertions about not having used FAP in manufacturing of exempted products. There is nothing on record to suggest that any of these assertions were found to be wrong on inquiry or investigation by the Department. Therefore in the facts of the case invocation of extended period is also bad in law. Both on account of merits as well as on limitation the impugned order is not sustainable and is set aside - appeal allowed.
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