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2022 (4) TMI 932 - HC - Central ExciseCENVAT Credit - waste and scrap or not - inputs which have not been received back by the respondent-assessee from the job workers - reversal in terms of Rule 4(5) (a) of the Cenvat Credit Rules 2002/2004 - violation of mandatory provision of Rule 4(6) of the Cenvat Credit Rules, 2002 - not obtaining permission from the jurisdictional Central Excise Authority when the goods are not received back into the factory and are removed from Job Workers’ premises - principles of res-judicata - time limitation to issue SCN - SCN is exact replica of earlier period - HELD THAT:- Applying the principles of consistency, the order binds the department as the transaction is identical and there is no fresh materials available with the Commissioner justifying the issuance of the show cause notice dated 30.04.2007. Merely by stating that the earlier order of adjudication came to be passed without calling for any conclusive evidence cannot be a ground to ignore the earlier order of adjudication. Precisely for such reason, we had extracted the relevant paragraphs of the order of adjudication dated 25.05.2004. A perusal of the said order shows that it is a speaking order and the Commissioner has assigned reasons as to why the proposal in the show cause notice should be dropped. Therefore, the department was wholly unjustified in not only issuing the show cause notice dated 30.04.2007 but also by preferring this appeal. In fact, this is a fit case where exemplary cost has to be imposed on the concerned official of the department for attempting to resurrect a settled issue. The Commissioner who issued the show cause notice dated 31.02.2004, after receiving the reply from the respondent assessee and after hearing the authorized representative in person by a speaking order dated 25.05.2004 dropped the proceedings. The department did not challenge the said order before the learned Tribunal. That apart, part of the period for which the show cause notice dated 30.04.2007 was issued overlaps the period covered in the earlier show cause notice dated 31.03.2004. Therefore, it can be safely concluded that the proceedings initiated in the year 2007, presumably after change of the Commissioner, were without any legal basis and can also be termed as misuse of statutory power conferred on the authority. Whether the show cause notice dated 30.04.2007 was issued within the time permissible or was it time barred? - HELD THAT:- Admittedly, the show cause notice was not issued within the time prescribed under Section 11A (1) of the Act. But the Commissioner had invoked the extended period. If such be the case, what are the fundamental tenets which are required to be fulfilled for invoking the extended period of limitation is required to be seen. For the same subject-matter the earlier show cause notice dated 31.03.2004 was issued. After adjudication the proceedings were dropped, the order attained finality. On the same subject-matter in the year 2007 another notice was issued of which part of the period overlapped. If such is the case, the department can never bring the case of the assessee to be a wilful suppression or mis-statement and if that be the legal position, the extended period under Section 11A cannot be invoked. Furthermore, on perusal of the show cause notice dated 30.04.2007, we find that there is no allegation against the respondent assessee of wilful suppression or mis-statement though the words “wilfully suppressed” has been used in one place in the show cause notice. Mere use of the words or expression “wilfully suppressed” with intend to avoid duty cannot hold the assessee guilty of wilful suppression. The same has to be established by the department by pointing out as to on what basis they have come to the prima facie conclusion that there has been wilful mis-statement or suppression of facts. Therefore, mere use of the said words and expression cannot validate the show cause notice. Therefore, the initiation of the proceedings itself is bad in law - There is nothing to indicate that the appellant revenue doubted the bona fides of the respondent assessee. In such circumstances extended period of limitation could never have been invoked in the assessee’s case. Thus, if Section 11A of the Act could not have been invoked, the question of imposing penalty or levying interest also does not arise. All these factors are taken into consideration and the Tribunal has rightly granted relief to the assessee. There are no grounds to interfere with the order passed by the Tribunal - appeal dismissed.
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