Tribunal overturns time-barred order, rules for appellant under Central Excise Act. The Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellant. It held that the show cause notice issued under ...
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Tribunal overturns time-barred order, rules for appellant under Central Excise Act.
The Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellant. It held that the show cause notice issued under Section 11A of the Central Excise Act, 1944 was time-barred as the Departmental Officers' visit to the factory on 25/09/2008 was crucial, and the demand exceeded the extended limitation period. The Tribunal found no willful suppression by the appellant, concluding that the demand was hit by limitation.
Issues: 1. Time limitation for issuance of show cause notice under Section 11A of Central Excise Act, 1944. 2. Claim of Cenvat credit under small scale Notification No.08/2003-CE dated 01/03/2003.
Analysis:
Issue 1: Time limitation for issuance of show cause notice under Section 11A of Central Excise Act, 1944 The appeal arose from an Order-in-Appeal passed by the Commissioner (Appeals) CGST & Central Excise Commissionerate, Allahabad. The appellants, engaged in manufacturing rolled products of Iron & Steel, received a show cause notice dated 04/05/2011 under proviso to Section 11A of the Central Excise Act, 1944. The notice proposed the recovery of Cenvat credit amounting to Rs. 2,44,597, alleging that the credit was claimed during a period when the appellant was availing exemption under Notification No.08/2003-CE dated 01/03/2003. The demand was confirmed through an Order-in-Original dated 27/03/2015. The appellant then appealed to the Commissioner (Appeals) who rejected the appeal, leading to the current appeal before the Tribunal.
Issue 2: Claim of Cenvat credit under small scale Notification No.08/2003-CE dated 01/03/2003 During the proceedings, the appellant argued that the show cause notice issued on 04/05/2011 was time-barred as the Departmental Officers visited their factory on 25/09/2008 and made endorsements on various registers, including the RG-1 Register and Cenvat Account Register. The appellant contended that the matter came to the Revenue's notice on 25/09/2008 itself, and therefore, the demand was beyond the extended period of limitation. The Tribunal considered the submissions from both sides and observed that the Departmental Officers' visit to the factory on 25/09/2008 was crucial. Since the issue related to the period from August to September 2008, the Department had only the normal period of limitation for issuing the show cause notice. Not finding any willful suppression on the appellant's part, the Tribunal concluded that the demand was hit by limitation. Consequently, the impugned order was set aside, and the appeal was allowed.
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