Tribunal overturns order due to time-barred notice, denies disallowance of Cenvat Credit The Tribunal allowed the appeal in favor of the appellant, setting aside the impugned order solely on the ground of limitation. The show cause notice ...
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Tribunal overturns order due to time-barred notice, denies disallowance of Cenvat Credit
The Tribunal allowed the appeal in favor of the appellant, setting aside the impugned order solely on the ground of limitation. The show cause notice issued beyond the normal period of limitation was deemed time-barred under Section 11A of the Central Excise Tariff Act, 1985. The disallowance of Cenvat Credit due to non-availability of stock was not upheld as there was no evidence of malpractices or fraudulent motives, and the extended period of limitation could not be invoked.
Issues: 1. Barred by limitation of time - Show cause notice issued beyond normal period of limitation. 2. Disallowance of Cenvat Credit due to non-availability of stock of clinker in factory premises.
Analysis:
Issue 1: Barred by limitation of time - Show cause notice issued beyond normal period of limitation The appellant argued that the show cause notice issued by the Department was time-barred as it was issued on 02.08.2013, which is beyond the normal period of limitation under Section 11A of the Central Excise Tariff Act, 1985. The appellant contended that the facts were known to the Department during their visit in October 2009, and thus, the notice should have been issued within one year from the date of the visit. The appellant emphasized that there was no element of suppression, fraud, or collusion to evade payment of Central Excise duty, which would justify the invocation of the extended period of limitation.
Issue 2: Disallowance of Cenvat Credit due to non-availability of stock of clinker in factory premises The Revenue argued that the disallowance of Cenvat Credit in respect of the non-availability of stock was proper and justified since the Audit Officers did not find any stock during their visit to the factory. However, the Tribunal noted that there was no Panchnama issued during the visit to the factory to proceed further in recovering the Cenvat demand. The Tribunal observed that the appellant had explained the availability of stock in the factory and its subsequent use for the intended purpose in response to the Audit Memo. It was highlighted that there was no evidence of malpractices or fraudulent motives in availing the Cenvat Credit for the non-available goods. Consequently, the Tribunal held that the extended period of limitation could not be invoked, leading to the setting aside of the impugned order in favor of the appellant solely on the ground of limitation.
In conclusion, the Tribunal allowed the appeal in favor of the appellant, setting aside the impugned order based on the limitation issue alone.
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