TMI Blog2016 (1) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... 506/2015-EX(DB), - Dated:- 4-11-2015 - Smt. Sulekha Beevi C.S., Member (Judicial) And Shri B. Ravichandran, Member (Technical) For the Petitioner : Shri Amit Jain and Shri Vipul Aggarwal, Advocate For the Respondent : Shri Govind Dixit, DR ORDER Per: B. Ravichandran The appellants are engaged in the manufacture of Cement and Cement Clinker liable to Central Excise Duty. They were availing CENVAT Credit on inputs, capital goods and on input services in terms of CENVAT Credit Rules, 2004. After certain inquiry in 2009, the Revenue entertained certain doubts regarding the eligibility of the appellant for CENVAT Credit availed by them in respect of TMT bars, MS Flats, MS Angles, MS channel, MS beam, sheets, MS. Round, MS Steel, MS Pipes, etc., during the period from July, 2007 to June, 2009. After enquiry and verification, a show cause notice dated 27/7/2012 was issued to the appellant to disallow and recover CENVAT Credit of ₹ 1,40,29,695/-. After a due process, the case was adjudicated resulting in the impugned order dated 27/3/2014. The ld. Commissioner confirmed the demand made in the show cause notice and imposed an equal penalty on the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner and the credit was allowed. The said order has become final as no further appeal has been filed. Hence, the appellants had bonafide belief regarding credit of such iron and steel items available to them. c) The demand in the present case is based on scrutiny of statutory monthly ER1-Returns filed in terms of Rule 12 of Central Excise Rules, 2002 as mentioned in the para 2 of the show cause notice. The case was initiated against them only based on scrutiny of monthly ER1-Returns. If such a scrutiny was conducted well beyond the normal period, the department cannot resort to demand for extended period for the reason of delay in taking up the scrutiny. d) When the appellant fulfilled the statutory obligation for maintaining records and filing statutory returns with full particulars, it is clear that they have supplied all information as required by law. For non-supply of additional information voluntarily, suppression clause cannot be invoked. Ld. Counsel placed the reliance on the following cases: (i) Apex Electricals Vs. Union of India - 1992 (61) ELT 413 (Guj.) (ii) Unique Resin Industries Vs. CCE - 1995 (75) ELT 861 (T) (iii) Gufic Pharma Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch decision in the case of Vandana Global Limited 2010 (253) ELT 440 LB. will make the appellant ineligible for the disputed CENVAT Credit amount. The appeal of the appellant was allowed on the point of limitation in view of the various decisions of the Tribunal in similar facts of the case. The matter is examined afresh in the light of the directions of the Honble High Court of Chhattisgarh as stated above. On perusal of the impugned order-in-original and the show cause notice, we find that the whole proceedings against the appellant started with scrutiny of ER1 Returns filed by the appellant for the period July, 2007 to June, 2009. As per records, the enquiry regarding CENVAT Credit on iron and steel items was initiated by issue of letter dated 20/10/2009 by the Superintendent of Central Excise, Bhatapara. It is not clear as to why the scrutiny of returns filed from July, 2007 was not conducted for more than two years. The show cause notice states during the scrutiny of monthly ER1-Returns it was revealed that they had taken CENVAT Credit of Central Excise Duty paid on structural items of iron and steel. The notice was issued on 27/7/2012 and well beyond the normal period of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Vandana Global (Supra). Apparently, the Larger Bench view was arrived at after interpretation and analysis of the decision of the Division Bench. This proposition of legal principle was not available prior to that. Rather various decisions which were discussed in the Larger Bench order held different interpretation on the subject. In this factual background it will not be tenable to hold that the appellant deliberately suppressed any material fact which helped them to evade duty or to avail an ineligible credit. In fact, the impugned order holds that the fabricated items by the appellant cannot be called as capital goods and as such no credit can be allowed on iron and steel items in terms of CENVAT Credit Rules, 2004. On the other hand, the original authority observes that the appellants have not mentioned manufacture such capital goods in their factory. Hence, they suppressed the fact. We find the element of contradiction in such observation. 9. We tend to agree the appellants plea that they have entertained a bonafide belief regarding the eligibility of MS Angles, etc for CENVAT Credit during the impugned period. This is supported by the adjudicating authorities finding in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be sustained. The ER1-Returns for the period starting from June, 2007 were available with the department and no reason is forthcoming for non-scrutiny or delayed enquiry for more than two years. The Tribunal in the case of Accurate Chemicals Industries Versus COMMR. OF C. EX., NOIDA-2014 (300) ELT 451 Tribunal Delhi examined the scope of scrutiny of ER1-Returns by the departmental officers. The Tribunal held, after examining the instructions issued by the Board from time to time, that returns filed by the assessee are required to be subject to detailed scrutiny in course of which the concerned officer can call for documents from the assessee wherever necessary for the scrutiny. In the present case, we find that the starting of the enquiry was stated to be scrutiny of ER1-Returns. This was done apparently after two years. Invoking extended period for demand is not tenable in such a situation. 11. Considering the above discussion, we find that there is no ground for invoking extended period for demand in the present case and as such the demand is barred by limitation. The impugned order is set aside on the issue of time bar and the appeal is allowed on this ground. [Oper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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