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TMI Blog2010 (12) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... a substantial error of law in applying ratio of the decision in case of M/s. Mafatlal Industries [2009 (245) E.L.T. 265 (Tribunal)] in holding that demand made in the subject show cause notice is barred by limitation? 3. Whether in the facts and circumstances of the case the Department has not validly invoked extended period of limitation in issuing show cause notice to the respondent?" 2. The respondent-assessee is engaged in the manufacture of excisable goods. The assessee used Light Diesel Oil (L.D.O.) as fuel in the manufacture of chemicals. The assessee used part of the quantity of the said L.D.O. for generation of steam. However, it sold part of the steam so generated to its subsidiary unit, that is, M/s. Mitsu Ltd., which was situated near the factory of the assessee, without payment of duty, from April 2000 to March 2003. According to the Department, since, Modvat/Cenvat credit had been taken on the inputs which were used in the manufacture of dutiable and exempted products, the assessee was required to maintain separate accounts of the inputs used in the manufacture of exempted products or to pay 8% of the value of exempted products upon clearance thereof in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded period of limitation. It was submitted that the Tribunal has not recorded any reasons as to why the findings recorded by the Adjudicating Authority as regards suppression are not justified; but by merely reproducing the relevant paragraph from the decision in the case of M/s. Mafatlal Industries has held that in the facts of the present case also, the show cause notice is barred by limitation. The learned counsel submitted that suppression is a question of fact and there cannot be a straight jacket formula as to the mode and manner of suppression and as such the Tribunal, by merely relying on its earlier decision in the case of M/s. Mafatlal industries and without recording any findings on the question of suppression, was not justified in holding that the show cause notice was barred by limitation and that extended period of limitation could not be invoked. It was submitted that the Tribunal, being the last fact-finding authority, was required to record its findings in respect of each aspect of the matter and that the Tribunal has miserably failed in doing so. Reliance was also upon a decision of this court in the case of Commissioner of Central Excise & Customs v. Chandubhau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court, it was pointed out that in cases where the legal position was not settled and there were decisions in favour of the assessee, the Court had taken a view that penalty should not be imposed and that the extended period of limitation should not be invoked. 7. On merits, Mr. Nainavati submitted that the fact that the assessee was availing credit in respect of LDO; the fact that steam is one of the items manufactured by the respondent on which credit is taken; as well as the fact that steam was being cleared to M/s. Mitsu was known to the Department. Thus, all the facts relevant were within the knowledge of the department and therefore, it cannot be said that there is any suppression on the part of the assessee so as to justify invocation of the extended period of limitation. It was further submitted that all these facts were before the Tribunal also, and it was after considering the same that the Tribunal has held that the extended period of limitation cannot be invoked. It was urged that on merits, on the basis of the available record, the respondent is in a position to satisfy the court that there was no case for invoking the extended period of limitation, hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration is whether merely because the Tribunal, which is the last fact finding authority has failed to record such findings, the matter is required to be remitted to the Tribunal for the purpose of deciding the said issue afresh giving rise to another round of litigation? 12. In this regard, a perusal of the order made by the Adjudicating Authority indicates that before the Adjudicating Authority it was the case of the assessee that steam was not its final product. The assessee used the said input viz. LDO as input for fuel, hence there was no requirement either to reverse the duty or make payment of 8% duty on value of steam so cleared to M/s. Mitsu Ltd. The assessee used LDO as fuel in its factory premises for the manufacture of its final product apart from selling a part of the steam so generated to M/s. Mitsu Ltd. According to the assessee, credit had, therefore, been rightly availed and there was no contravention of Rule 57AD(i) of the Central Excise Rules, 1944 read with Rule 6 of Cenvat Credit Rules, 2001 and 2002 since the scope of the two rules suggested that the same apply to manufacture of both exempted and dutiable final products. In all the rules, viz. Rules 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rules. In the circumstances, the evidence on record clearly does not substantiate the findings of the Adjudicating Authority as regards suppression. Besides, as rightly contended by the learned advocate on behalf of the assessee, at the relevant time, the legal position in this regard was not clear and there were various decisions of the Tribunal and different High Courts in favour of the assessee, hence, the assessee was entitled to entertain a bona fide belief that it was not required to maintain separate accounts in respect of the inputs used as fuel and that it was entitled to avail of Cenvat Credit in respect of the same. 14. In the light of the aforesaid, though the learned counsel for the appellant is justified in assailing the impugned order of the Tribunal as being a non-speaking one as also on the ground that the Tribunal has not recorded any findings on the question of suppression, this Court is of the view that no useful purpose would be served by remitting the matter back to the Tribunal, inasmuch as the learned advocate for the respondent- assessee on the basis of the record of the case, has been able to make out a case before this Court that there was no supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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