TMI Blog2012 (5) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... ’s contention that the relevant information with regard to availment of the capital goods Cenvat credit was deliberately suppressed by the appellant, show cause notice is time barred and as such the Commissioner (Appeals)’s order upholding the Cenvat credit demand is not sustainable, appeal is allowed - E/1458/2009(SM)(BR) - 388/2011-SM(BR)(PB), - Dated:- 1-6-2011 - Shri Rakesh Kumar, J. Shri V. Swaminathan, Advocate, for the Appellant. Shri Anil Khanna, SDR, for the Respondent. [Order]. The appellant are manufacturers of Barium Ferrite Powder and Ferrite Magnate chargeable to Central Excise Duty. Their head office is at Sadar Bazaar and their factory at Okhla and Faridabad. During April 2002 period, they received one c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een taken. However, during that period the appellant were clearing the goods at nil rate of duty on job work basis under job work challan by availing exemption under Notification No. 214/86-C.E.. The department, therefore, was of the view that since the capital goods in respect of which the credit of Rs. 1,09,695/- had been taken were being used exclusively for manufacture of exempted goods, in terms of the provision of Rule 6(4) of Cenvat Credit Rules, the appellants were not entitled for this credit. The above irregularities had been detected in course of audit of the records of the appellant. On the basis of the above facts, the show cause notice dated 24-4-06 was issued to the appellant for recovery of allegedly wrongly taken Cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oice was also in the name of Okhla unit, that though initially the Cenvat credit was taken on the basis of that invoice, on realizing that the goods are meant for Faridabad unit, the same were transferred to Faridabad unit after reversing the Cenvat credit and endorsing the invoice in favour of Faridabad unit, that on the basis of endorsed invoice, Faridabad unit took Cenvat credit of Rs. 11,280/-, that the other consignment of imported capital goods involving additional customs duty of Rs. 1,07,280/- was received at the head office from where by mistake it was sent to Okhla unit by endorsing the bill of entry in favour of that unit, but subsequently realizing that the same was meant for Faridabad unit, the same were transferred by endorsin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the goods received initially transferred by mistake to Okhla unit could have been cleared as such under their invoices after reversing the credit and, hence, there could not be any intention to wrongly avail the Cenvat credit, that similarly the fact that the goods were being cleared under job work challans at nil rate of duty under Notification No. 214/86-C.E. was known to the department and, hence, it cannot be said that the department was not aware of the availment of Cenvat credit in respect of capital goods, in question, were being use exclusively in the manufacture of goods cleared at nil rate of duty under exemption Notification No. 214/86-C.E., that in view of this, the entire duty demand is time barred and, hence, the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent with regard to the availment of the above Cenvat credit and, hence, the longer limitation period under proviso to Section 11A(1) has been correctly invoked and penalty under Section 11AC has been correctly invoked. 3. I have carefully considered the submissions from both the sides and perused the records. 4. The Cenvat credit demand of Rs. 1,18,396/- is in respect of April, June and August 2004 but the show cause notice has been issued on 24-4-06 by invoking extended period under proviso to Section 11A(1) which is also applicable for recovery of wrongly taken Cenvat credit. The extended period for recovery of wrongly taken Cenvat credit would be available only if this alleged wrong availment of Cenvat credit has happened by the reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 1,09,695/- in respect of capital goods which are alleged to have been used exclusively for manufacture of the goods on job work basis, which were cleared at nil rate of duty, since the appellant during that period were regularly filing the ER-1 returns and the fact of clearance of goods without payment of duty under job work challan under Notification No. 214/86-C.E., was known to the department, it is difficult to accept the department s contention that the relevant information with regard to availment of the capital goods Cenvat credit was deliberately suppressed by the appellant. In view of these circumstances, I hold that the show cause notice is time barred and as such the Commissioner (Appeals) s order upholding the Cenvat credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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