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2016 (1) TMI 520 - CESTAT NEW DELHI

2016 (1) TMI 520 - CESTAT NEW DELHI - 2016 (332) E.L.T. 356 (Tri. - Del.) - Cenvat Credit - Extended period of limitation - Bonafide belief - Credit on 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 - manufacture of Cement and Cement Clinker liable to Central Excise Duty - Held that:- We tend to agree the appellants’ plea that they have entertained a bonafide belief regarding the eligibility of MS A .....

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on the issue of time bar and the appeal is allowed on this ground. - Decided in favor of assessee. - Appeal No. E/53614/2014-EX[DB] - Final Order No. A/53506/2015-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 lia .....

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otice 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 appellant. 2. Aggrieved by the said order, the appellant filed an appeal before this Tribunal. The said appeal was decided vide final order no. 54600 of 2014 dated 27/11/2014. The Tri .....

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en the matter is taken up for hearing, the ld. Counsel for the appellant, Shri Amit Jain, submitted that during the period March, 2006 to June, 2009, the appellants procured various iron and steel items like MS Plate, MS Angle, MS Rail, Joists, Coils, MS Beam, Rounds and MS Flats. These iron and steel items have been used in the fabrication of machineries within the factory such as conveyor system, wagon loading system, coal washery, hoppers etc and parts thereof. The credit on these iron and st .....

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cal Central Excise Audit. The enquiry in the present case started with letter dated 20/10/2009 by the Superintendent of Central Excise, Bhatapara calling for certain details. The details as called for have been submitted by the appellants on 11/3/2010. There is no suppression whatsoever and the departmental authorities had full information with regard to the present case. There is no requirement for giving details of receipt of iron and steel items in the ER1 Returns. b) In respect of appellants .....

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nthly 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 f .....

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when the matter was in dispute involving interpretation and different decision by the Original and Appellate fora, longer period of demand cannot be invoked. It is clear that reference to larger bench in the case of Vandana Global Limited was only on account of conflicting decisions. Hence, when the issue itself is amenable to various interpretation, the appellant cannot be alleged to have suppressed or committed fraud with an intend to evade the payment of duty. The ld. Counsel relied on the fo .....

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ion in Vandana Global Limited, they have a strong case on merits also. 6. The Ld. AR, Shri Govind Dixit, reiterated the findings by the original authority specifically on the question of time bar. He further submitted that the appellants never disclosed that they were engaged in the fabrication of Capital Goods in their factory. Their ER1 monthly statements mentioned only cement and cement clinkers as the goods manufactured by them. As the appellant has not indicated the fact of fabrication of c .....

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heard both the sides and perused the appeal records. 8. The Tribunal in the final order dated 27/11/2014 held that the demand in the present case was raised and confirmed on the ground that the legal principle to be followed in terms of larger bench 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 th .....

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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 demand. The original authority justified the applicabil .....

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xcisable goods. The ld. Original Authority relied on certain case laws (Para 39.1 of the impugned order). We find on perusal, the case laws deal with a set of facts which have no relevance to decide the present case. The Larger Bench decision of the Tribunal in Nizam Sugar Factory Vs. Collector of Central Excise, Hyderabad reported in 1999 (114) ELT 429 LB deals with relevant date with reference to the department acquiring the knowledge about the activity. The other case laws referred by the ori .....

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fore the decision by the Larger Bench in Vandana Global Limited, the eligibility was treated differently, largely in favour of the assesses. The Larger Bench decision examined the availability of the credit on these items when the resultant product gets permanently embedded to the earth. The larger Bench concluded that the capital goods under the CENVAT Credit Rules for the purpose of credit have to be excisable goods. Items used for supporting structures cannot be treated as inputs for capital .....

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position 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 .....

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the adjudicating authorities finding in one of the appellants other unit in Andhra Pradesh. The credit on similar iron and steel items were allowed by the department in that unit. We were informed that no appeal has been filed against the said order. The Hon ble Gujarat High Court in the case of Commissioner of C. EX., CUS. & S.T., Daman Vs. N.R. Aggarwal Industries reported in 2014 (300) ELT 213 (Guj.) upheld the Tribunal s order regarding the non availability of extended period for demand .....

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ppression has been used in the proviso to section 11A of the Act of the Act accompanied by very strong words as fraud or Collusion and therefore, has to be construed strictly. Mere omission to give correct information is not a suppression of facts unless it was deliberate to stop the payment of duty. The incorrect statement cannot be equated with willful misstatement. Similarly, the Hon ble Supreme Court in the case of Commissioner of C. EX., Bangalore Vs. Karnataka Agro Chemicals -2008 (227) EL .....

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