2022 (4) TMI 1205 - AT - Central Excise

Appellate Tribunal Remands CENVAT Credit Dispute, Criticizes Unnecessary Verification

The Appellate Tribunal allowed the appeal, remanding the case to the lower authority for verification of disputed CENVAT credit without delving into the ... CENVAT Credit - credit availed by the appellants on the basis of the invoices issued prior to 01.09.2014 - HELD THAT:- CESTAT in the cases of M/S. UMESH ENGINEERING WORKS VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU WEST [2019 (1) TMI 1158 - CESTAT BANGALORE], SARDA ENERGY AND MINERALS LTD VERSUS C.C.E. & S.T. -RAIPUR [2019 (4) TMI 473 - CESTAT NEW DELHI], M/S. SURYADEV ALLOYS AND POWER PVT. LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE CHENNAI OUTER [2018 (11) TMI 1019 - CESTAT CHENNAI], the facts of which are identical to the instant case, has held that credit is admissible. Commissioner (Appeals) also does not dispute the same; instead of allowing the credit he remands the case following BHARAT ALUMINIUM COMPANY LIMITED VERSUS JOINT COMMISSIONER OF CENTRAL TAX, GOODS & SERVICE TAX [2019 (7) TMI 1084 - CESTAT NEW DELHI]. Extended period of limitation - HELD THAT:- The show cause notice was issued on 04.10.2018 covering the period from July 2014 to February 2017; the issue has been in the knowledge of the Department in view of audit and other verifications conducted. There is no scope for invoking extended period. It is further found that it was not discussed or controverted at the Original Authority level. Though the Appellate Authority has discussed the issue on merits and held that credit is admissible. He remanded the matter to the lower authority for verification of documents. He has not given any specific direction on the other issues - the lower authority should allow the credit after verifying the documents, without going in to merits of the issue. Appeal allowed by way of remand. Issues:- Disputed CENVAT credit remanded for verification- Admissibility of credit on invoices issued before 01.09.2014- Reversal of disputed credits by the appellants- Demand of credit without basis- Invocation of extended period of limitationAnalysis:1. The appellant challenged the Order-in-Appeal remanding the issue of disputed CENVAT credit to the lower authority for verification of invoices. The appellant argued that the details of invoices were already mentioned in the show cause notice and Order-in-Original, questioning the need for remand. The appellant also highlighted the reversal of certain credits and disputed the demand of credit without a valid basis.2. The Appellate Tribunal examined the admissibility of credit on invoices issued before 01.09.2014. Referring to relevant judgments, the Tribunal found that the credit was admissible based on precedents. The Tribunal noted that the Commissioner (Appeals) did not dispute the admissibility but remanded the case for verification, which was deemed unnecessary as discrepancies were not raised in the show cause notice.3. Regarding the reversal of disputed credits by the appellants, the Tribunal emphasized that the reversal did not negate the appellants' right to claim those credits. The Tribunal also addressed the invocation of the extended period of limitation, concluding that there was no valid reason to invoke it as the issue had been known to the Department through audits and verifications.4. Ultimately, the Tribunal allowed the appeal by remanding it to the lower authority to verify the documents and grant the credit without delving into the merits of the issue. The Tribunal directed the lower authority to process the credit within a specified timeframe, emphasizing the decision on the admissibility of the credit had already been made in favor of the appellant.