2026 (3) TMI 1522 - AT - Central Excise

Extended limitation fails without suppression; importer-issued invoices remained valid for Cenvat credit before the 2014 registration rule.

Where statutory returns disclosed the relevant facts, the extended period of limitation could not be invoked for the alleged clandestine removal of coke, ... Demand of duty - clandestine removal of coke - barred by limitation - Extended period of limitation - Cenvat credit of CVD paid on imported coal - availment of the benefit of Notification No. 67/1995-CE. Extended period of limitation - Knowledge of facts through ER-1 returns - Notification No. 67/95 exemption - HELD THAT:- The Tribunal held that the assessee had been regularly filing ER-1 returns and had disclosed therein its claim of exemption under Notification No. 67/1995-CE. Since the fact of availing that exemption was already within the knowledge of the Revenue, the extended period was not invokable. As the notice for the disputed period was founded on the extended period alone, the entire duty demand failed on limitation, and with it the penalty also could not survive. [Paras 13] The duty demand on alleged clandestine removal was set aside as time-barred, and no penalty was imposable. Prospective operation of amendment governing cenvatable invoices - Cenvat credit on importer-issued invoices - HELD THAT: - The Tribunal found that the Revenue's objection was based on Notification No. 8/2014 Central Ex. (NT), which required separate registration as an importer for issuing cenvatable invoices. That notification came into effect from 01.04.2014 and the entire disputed demand related to the period prior thereto. The amendment was therefore held to operate prospectively and not retrospectively, and on that basis the adjudicating authority was right in allowing the credit. [Paras 14, 15] The Revenue's appeal was dismissed and the allowance of cenvat credit to the assessee was upheld. Final Conclusion: The assessee's appeal was allowed on the ground that the duty demand founded on the extended period was barred by limitation. The Revenue's appeal was dismissed, the amendment requiring separate importer registration being held prospective and inapplicable to the period in dispute. Issues: (i) Whether the demand of duty on the alleged clandestine removal of coke was barred by limitation and the extended period could be invoked. (ii) Whether Cenvat credit of CVD paid on imported coal was admissible on the strength of invoices issued by the importer and whether the 2014 registration requirement applied retrospectively.Issue (i): Whether the demand of duty on the alleged clandestine removal of coke was barred by limitation and the extended period could be invoked.Analysis: The demand covered the period January 2013 to January 2014, while the notice was issued by invoking the extended period. The appellant had been filing ER-1 returns and had disclosed availment of the benefit of Notification No. 67/1995-CE. Since the relevant facts were already within the knowledge of the Revenue, the foundation for invoking the extended period was absent.Conclusion: The extended period of limitation was not invokable and the duty demand on this issue failed; the confirmed demand and consequential penalty were set aside.Issue (ii): Whether Cenvat credit of CVD paid on imported coal was admissible on the strength of invoices issued by the importer and whether the 2014 registration requirement applied retrospectively.Analysis: The credit denial was based on Notification No. 8/2014-Central Excise (N.T.), which introduced a separate registration requirement for importers issuing cenvatable invoices from 01.04.2014. The disputed credit related to a prior period, so the notification could operate only prospectively. On that basis, the invoice issued by the importer remained a valid document for credit availment for the period in dispute.Conclusion: The credit was rightly allowed, the Revenue's challenge failed, and the denial of Cenvat credit was rejected.Final Conclusion: The assessee succeeded on both the limitation issue and the credit eligibility issue, and the Revenue's appeal did not survive.Ratio Decidendi: When the relevant facts are disclosed in statutory returns, the extended period cannot be invoked without suppression or concealment; and a notification imposing a new registration condition for availing credit operates prospectively unless expressly made retrospective.