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TMI Blog2024 (12) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... e Cenvat Credit without proper documents. After the detail investigation, appellant was issued show cause notice dated 06.01.2016 , inter alia, proposing demand of Central Excise duty , recovery of Cenvat credit with interest and also imposition of penalty under Section 11AC of the Act and under Rule 15 of Cenvat Credit Rules, 2004. In adjudication, the adjudicating authority vide impugned order dated 21-10-2016 confirmed the proposed demand and also imposed penalty. He also imposed penalty under Rule 26 of Central Excise Rules, 2002 on Shri Satish K Nair. Hence, against the said order, the appellants are before us. 2. Shri A Banergee, Learned Counsel appearing for the appellant submits that duty was not paid by appellant because appellant was purely guided by their Chartered Accountant that excise registration is not required to be taken and excise duty is not required to be paid on the manufacture and clearances of goods. It is not that duty is not paid out of any malafide intention. Had Chartered Accountant advised that appellants are required to obtain excise registration and to pay excise duty, appellants would not have done so. There was no loss to appellant in obtaining exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary evidences and materials proving allegations of suppression with an intent to evade the payment of duty in the SCN. On the contrary, it is Appellants who had furnished all the necessary documents and other relevant materials conclusively proving that there is no case of any offence as contemplated u/s.11A(4) of the Central Excise Act, 1944. Onus to prove fraud and misstatement with intent to evade payment of tax squarely lies on the shoulders of Revenue and only when this onus is discharged, the burden shifts on the shoulders of Assessee to prove that he never intended to evade liability. Since Department has not discharged the burden cast on it, larger period could not be invoked. He placed reliance on the following judgments:- * Commissioner Of C. Ex., Aurangabad V. Bajaj Auto Ltd.- 2010 (260) ELT 17 (S.C.) * Commissioner Of Central Excise, Bangalore-II Vs. ITC Limited - 2010 (257) ELT 514 (KAR.)- * Commissioner Of Central Excise, Allahabad Vs. Govind Mills Ltd. - 2013 (294) ELT 361 (All.)- 2.3 He also submits that Appellant are registered under the provisions of GVAT Act and have filed returns for the period under dispute making full disclosure of all material facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Appellants would have collected the excise duty and buyers could have availed the cenvat credit and, therefore, in the process, there is no gain either to appellants or to buyers in evading to pay the duty. Charge of intention to evade payment of duty is based on conjectures and surmises. No cogent reasons are given or findings recorded supported by documentary evidences establishing charge of suppression with intent to evade payment of tax. Therefore, allegations at para 5 of the impugned OIO justifying invoking of larger period are not sustainable either in fact or in law. 2.5 He also submits that in view of above, it is evidently clear beyond any doubt that there is no suppression or willful mis-statement with intention to evade payment of duty as contemplated u/s. 11A(4) of the Act and, therefore, larger period cannot be invoked in the given case and the demand covered by larger period is barred by limitation. In facts of the case, demand pertaining to larger period be set aside and quashed as barred by limitation. Significantly, mere failure to pay duty which is not due to any collusion, fraud or willful misstatement, cannot justify imposition of penalty u/s.11AC(1)(c). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AD.). 3. Shri Mihir G Ryka, Learned Additional Commissioner (Authorized Representative) appearing on behalf of revenue reiterated the findings given by the Ld. Commissioner and justified the action of the Department in invoking larger period. 4. We have heard both sides and considered the submissions made by both sides and perused the records. 4.1 We find that in the present matter appellant have not contested the matter on merits and they have strongly argued the matter on limitation only. In this context we find that there is a substantial force in the argument advanced on behalf of the appellant on the issue of limitation. We find that in this matter the show cause notice is dated 06.01.2016 and demand of duty pertains to the period December 2010 to June 2015. The extended period has been invoked on the ground that the Appellants had suppressed the material facts from the knowledge of the Department by not obtaining Central Excise registration and by not observing the other statutory formalities required under Central Excise Law. Thus, it appears that Appellant has deliberately and consciously suppressed material fact as to manufacture and clearances of excisable goods, contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of deliberate and conscious suppression of material facts as to manufacture and clearance of excisable goods with intent to evade payment of excise duty as contemplated u/s. 11A(4) of the Act and larger period could not be invoked in such case. It is now well-settled that for invoking the proviso to Section 11A(4), there must be suppression of facts, fraud, mis-statement, etc., with an intention to evade payment of duty, the same are absent in this matter. 4.3 We also find that in the case of Padmini Products v. CCE [1989 (43) E.L.T. 195 (S.C.)] the Hon'ble Apex court also held that "mere failure or negligence on the part of the producer or manufacturer either not to take out a licence in case where there was scope for doubt as to whether licence was required to be taken out or where there was scope for doubt whether goods were dutiable or not, would not attract Section 11A of the Act." 4.4 We also find that during the investigation partner of the Appellant firm also informed the reason to the department for non-payment of central excise duty on clearance of goods on invoices. Duty was not paid by appellants because appellant were guided by their Chartered Accountant that ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, the demand for longer period is not sustainable. 4.7 As regard the cenvat credit demand, we find that Cenvat credit was availed in the month of September, 2015 and the same was also reversed in the month of September 2015 by the appellant as evident from the ER-1 return for the month of September, 2015. Appellant had taken the credit, they never utilized it and when the irregularity was pointed out the credit was reversed without demur. In these circumstances, we find that neither cenvat demand nor interest demand is sustainable and this issue is squarely covered by the judgment of this Bench in the case of Page Apparel Private Limited v. CCE - 2007 (208) E.L.T. 108 (Tribunal.-Bang.) wherein it was held that the interest would not be payable when there is no utilization of Modvat credit. Further, the Hon'ble Supreme Court in the case of CCE v. Narayan Polypast - 2005 (179) E.L.T. 20 (S.C.) held that once the credit was reversed, it amounted to not taking the credit at all. 4.8 As per our above observation on limitation that the appellant had no intention to evade duty, the appellant is also not liable for penalty. Accordingly, the entire penalty involved in the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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