2022 (5) TMI 201 - AT - Central Excise

Tribunal remands case for fresh decision, instructs consideration of evidence & personal hearing.

The Tribunal set aside the impugned order and remanded the case to the original adjudicating authority for a fresh decision. The authority was instructed ... CENVAT Credit - common inputs and input services used for taxable as well as exempt goods - non-maintenance of separate accounts in respect of clearances of 5 numbers of Aircraft Towing Tractors (on which exemption from payment of duty was available - contravention of Explanation-II to Rule 6(3) of the Cenvat Credit Rules, 2004 - time limitation - HELD THAT:- It is not forthcoming from the records, as to whether the appellants have specifically raised any objection or filed any protest letter while making payment of such amount. However, it is only clear from the order that the amount so paid had already been ordered for appropriation. Since, the amount in question had been paid by the appellant, protest if any registered by the appellant vis-a-vis this particular aspect needs to be verified from the available records with the adjudicating authority or with the appellants. This assumes significance as the appellants having paid the amount are raising the issue of protest and the question of limitation before the Tribunal. It is not clear whether this issue was agitated at the time of adjudication of the matter. Moreover, it is also not coming forth with clarity as to the reason for payment of such amount by the appellants. The issue should travel back to the original authority for proper examination considering all the facts of the case and submissions of the appellants. Needless to say that the imposition of penalty should also be looked into afresh. Availment of Cenvat credit on inputs, which were exclusively used in the manufacture of exempted goods viz. Tatra Trucks and Tatra Engines - HELD THAT:- The impugned order has also recorded that against the liability of Rs.1,94,104/-, the appellants had accepted the demand to the extent of Rs.14,664/- and contended that the balance amount is under scrutiny for taking appropriate action in the matter within a short period. It has further been stated that the appellants have not come forward with any further details regarding the balance amount. Since, the appellants did not submit the proof regarding non-reversal of Cenvat credit for the balance amount, the matter cannot be decided at this end as to whether proceedings initiated for recovery of such amount and confirmation of the demand under Rule 14 ibid read with proviso to Section 11A(1) is in conformity with the statutory provisions - as the adjudicating authority is required to have a relook at the case on merits, it will not be fair to conclude the issue as far as penalties - matter on remand. Demand amounting to Rs.7,78,03,800/- confirmed in the impugned order - appellants had not maintained separate accounts and had not followed the procedures laid down under Rule 6(3)(i) ibid. - HELD THAT:- The matter should be looked into afresh by the original authority for a decision, whether the proportionate Cenvat credit had actually been reversed by the appellants or not. Demand of Rs.2,97,56,551/- on the appellants, assigning the reasons that the formula prescribed under Rule 6(3)(i) have not been complied with - HELD THAT:- Since, the appellants claimed that they had maintained separate records for use of input and input services in the manufacture of dutiable and exempted goods, such aspect regarding maintenance of records need to be examined by the original authority. Time Limitation - HELD THAT:- The original authority should also examine the aspect of limitation and to such extent, should rely upon the submissions made by the appellants, as recorded - matter on remand. Appeal allowed by way of remand. Issues Involved:1. Non-payment of amount under Rule 6(3)(i) of the CENVAT Credit Rules, 2004 for clearances of Aircraft Towing Tractors.2. Availment of CENVAT credit on inputs used exclusively in the manufacture of exempted goods (Tatra Trucks and Tatra Engines).3. Availment of CENVAT credit on common inputs and input services used in the manufacture of exempted final products (Tatra Trucks and Tatra Engines) without maintaining separate accounts or paying the prescribed percentage of the value of clearances.4. Limitation period for raising the demand.Issue-wise Detailed Analysis:1. Non-payment of amount under Rule 6(3)(i) of the CENVAT Credit Rules, 2004 for clearances of Aircraft Towing Tractors:The Department observed that the appellants had not paid the required amount under Rule 6(3)(i) for clearances of Aircraft Towing Tractors during April and May 2009. The appellants contended that the non-payment was due to oversight and had subsequently paid the amount, which was appropriated in the impugned order. They also argued that the demand was barred by limitation as the clearances were indicated in the monthly ER-1 returns. The Tribunal noted that the records did not clarify whether the appellants had raised any protest while making the payment. The issue was remanded to the original authority for proper examination, including the aspect of limitation and any protest registered by the appellants.2. Availment of CENVAT credit on inputs used exclusively in the manufacture of exempted goods (Tatra Trucks and Tatra Engines):The Department claimed that the appellants availed credit on inputs used exclusively for exempted goods, which is against Rule 6(3). The appellants argued that they did not avail credit on such inputs and had reversed the credit for common inputs. The Tribunal observed that the appellants accepted part of the demand and reversed the credit for common inputs but did not provide proof for the balance amount. The issue was remanded to the original authority to verify the records and determine the correctness of the credit reversal and the imposition of penalties.3. Availment of CENVAT credit on common inputs and input services used in the manufacture of exempted final products (Tatra Trucks and Tatra Engines) without maintaining separate accounts or paying the prescribed percentage of the value of clearances:The Department alleged that the appellants did not maintain separate accounts or pay the required percentage for common inputs and input services used in exempted goods. The appellants contended that they maintained separate inventory and reversed the proportionate credit. The Tribunal found that the adjudicating authority did not consider the appellants' evidence of proportionate credit reversal and remanded the issue for fresh examination, including the verification of documentary evidence.4. Limitation period for raising the demand:The appellants argued that the demand was barred by limitation as the details were disclosed in the ER-1 returns, and there was no willful misstatement or suppression of facts. The Tribunal noted that the original authority did not properly address the limitation aspect and remanded the issue for reconsideration. The original authority was directed to examine the appellants' submissions and relevant case laws, including the Tribunal's previous order in the appellants' own case.Conclusion:The Tribunal set aside the impugned order and remanded the case to the original adjudicating authority for a fresh decision. The authority was instructed to consider all evidence, case laws, and submissions by the appellants and provide an opportunity for a personal hearing before making a final decision. The appeal was allowed by way of remand for comprehensive re-examination of all issues.