2018 (5) TMI 2016 - AT - Central Excise

Tribunal sets aside orders for lack of disclosure and time limitation

The Tribunal ruled in favor of the appellant, setting aside the orders of the Lower Authorities due to the absence of suppression of facts and the Show ... CENVAT Credit - input services - Transport of Goods by Road (GTA) - service beyond the place of removal - period April, 2006 to March, 2007 - Suppression of facts or not - time limitation - HELD THAT:- The impugned Show Cause Notice has been issued as a result of the scrutiny of the records and the ER-1 Return of the appellant as can be seen from para 3 thereof. This clearly indicates that there was no suppression of facts on the part of the appellant assessee as they have reflected the same in their statutory records. It is the case of the Revenue that the appellants were supposed to inform the matter to the Department as they have taken and utilized subject input service which is beyond the manufacturing liability fixed as per agreements ibid and this fact was suppressed in order to take the benefit in manufacturing account unlawfully. There are no element of misstatement, fraud, collusion or suppression of facts with an intent to evade payment of Central Excise Duty. Accordingly, the extended period of limitation cannot be invoked in the present case. Show Cause Notice is barred by limitation - appeal is allowed on the ground of limitation alone. Issues Involved:Irregular availment of Cenvat Credit of Service Tax on transport of goods by road beyond the place of removal, applicability of Notification No. 10/2008-C.E (N.T.), invocation of Section 11 AC of the Central Excise Act, 1944, determination of place of removal, suppression of facts, limitation period for Show Cause Notice.Analysis:1. Irregular Availment of Cenvat Credit of Service Tax:The case involved a Contract Manufacturing Unit (CMU) availing Cenvat credit on inputs and capital goods supplied by the principal, M/s. Parle Biscuits Pvt. Ltd, Mumbai. A Show Cause Notice was issued for irregular availment of Cenvat Credit of Service Tax paid on transport of goods by road beyond the place of removal. The Adjudicating Authority ordered recovery, interest, and penalty, which was upheld by the Ld. Commissioner (Appeals).2. Applicability of Notification No. 10/2008-C.E (N.T.):The appellant argued that the Notification No. 10/2008-C.E (N.T.) dated 01/03/2008, which brought changes, was not applicable to the case, as it was much prior to 01/03/2008. The appellant contended that the Cenvat Credit was utilized for payment of duty on final products based on MRP/RSP declared by M/s. Parle, which included the element of freight paid on transportation of finished goods. The appellant claimed that the Service Tax on this GTA service was paid by M/s. Parle, and they availed Cenvat Credit as an 'Input Service' used in the manufacture of final products.3. Invocation of Section 11 AC of the Central Excise Act, 1944:The appellant's counsel argued that the provisions of Section 11 AC of the Central Excise Act, 1944 were not applicable due to the absence of essential exigencies like suppression, fraud, or misstatement. The appellant maintained that there was no element of misstatement, fraud, collusion, or suppression of facts to evade payment of Central Excise Duty, which would warrant the invocation of Section 11 AC.4. Determination of Place of Removal:The Department contended that the depots were not of the appellant but of Parle Biscuits Private Limited, and thus, they could not be treated as the place of removal. The issue of whether the depots could be considered as the place of removal was a crucial point of contention between the parties.5. Suppression of Facts and Limitation Period:The Tribunal observed that there was no suppression of facts on the part of the appellant, as all relevant information was reflected in the statutory records and returns. The Tribunal found that the Show Cause Notice was issued beyond the limitation period, and there was no element of misstatement, fraud, or suppression of facts to warrant the extended period of limitation. Consequently, the appeal was allowed on the ground of limitation alone, and the impugned orders were set aside.In conclusion, the Tribunal ruled in favor of the appellant, setting aside the orders of the Lower Authorities due to the absence of suppression of facts and the Show Cause Notice being barred by limitation. The judgment highlighted the importance of compliance with procedural formalities and the timely disclosure of relevant information in statutory records.