2000 (7) TMI 517 - AT - Central Excise

Tribunal allows appeal due to unjustified extended demand period.

The tribunal allowed the appeal, finding that the extended period for issuing the demand was not justified. - 2001 (130) E.L.T. 479 (Tri. - Mumbai) Modvat credit - Rule 57G declaration - classification of inputs - extended limitation period under proviso to Rule 57-I(1) for suppression - gate passes and RG 23A/RT 12 returns as disclosureModvat credit - Rule 57G declaration - classification of inputs - Credit claimed on kraft insulating formers not covered by the appellant's Rule 57G declaration of insulating kraft paper - HELD THAT: - The Tribunal upheld the finding that the goods described as 'formers' were not the same as the insulating kraft paper declared under Rule 57G. The term 'former' has meanings relating to a frame or mould used in electrical coils, and the gate-pass classification under Heading 85.48 (electrical parts) supports that the items were distinct from kraft insulating paper shown in the declaration. The appellant did not produce material to demonstrate that the formers were identical to the kraft papers declared, and on the material before the authority the credit could not be sustained as being declared under Rule 57G. [Paras 3]The appellant's claim that the formers were the insulating kraft paper declared under Rule 57G was rejected and the input was held not to have been declared as claimed.Extended limitation period under proviso to Rule 57-I(1) for suppression - gate passes and RG 23A/RT 12 returns as disclosure - Invocation of the extended period for assessment under the proviso to Rule 57-I(1) on the ground of suppression was not sustainable - HELD THAT: - The notice invoked the extended period alleging suppression, apparently for failure to declare the formers. The Tribunal found that the department had access to gate passes (showing classification) filed along with extracts of the RG 23A statement and RT 12 returns which would have revealed that credit was taken on those items. Therefore the department could have issued demand within the statutory six-month period under Rule 57G, and the proviso extending limitation on account of suppression was not available. For this reason the extended period could not be relied upon to sustain the demand. [Paras 4, 5]The extended limitation period was held inapplicable and the demand could not be sustained on the ground of suppression.Final Conclusion: The appeal is allowed; the impugned order is set aside because the inputs in question were not shown to be the declared insulating kraft paper and the department was not entitled to invoke the extended limitation period for suppression. The appellant availed Modvat credit for insulating kraft formers, but the department disputed the classification. The Addl. Collector upheld the denial of credit, citing non-declaration of inputs. However, the notice alleging suppression lacked specificity. The tribunal allowed the appeal, finding the extended period for issuing the demand was not justified.