TaxTMI 
TaxTMI 
2013 (9) TMI 499
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....in the generation of steam which was, in turn, used to run the power plant for generation of electricity. 6 show-cause notices were issued to them by the department alleging that CENVAT credit on inputs to the extent used in, or in relation to, the generation of that portion of electricity which was supplied to the above corporation without being captively used in the manufacture of excisable products within the factory was not admissible to them. All the show-cause notices raised demands of duty equivalent to the CENVAT credits proposed to be denied. The essential particulars of the show-cause notices are tabulated below: Sl. No. Date of show-cause notice Amount demanded (Rs.) Period of Demand 1 05.01.2007 3,34,683 12/2001 to 11/2006 2 04.01.2008 71,651 12/2006 to 09/2007 3 13.10.2008 1,55,583 10/2007 to 03/2008 4 24.02.2009 6,276 04/2008 to 11/2008 5 04.01.2010 17,434 12/2008 to 05/2009 6 01.07.2010 27,557 06/2009 to 12/2009 The first of the above 6 show-cause notices had invoked the proviso to Section 11A (1) of the Central Excise Act for recovery of duty, alleging that the noticee had suppressed certain facts intentionally to evade payme....
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....t this view of the learned Commissioner (Appeals) is contrary to the Hon'ble Supreme Court's judgment in CCE, Visakhapatnam Vs. M/s. Mehta & Co. [2011-TIOL-17-SC-CX] (judgment dated 10.02.2011 in Civil Appeal No. 1090/2009). Reliance is also placed on CCE, Surat Vs. Neminath Fabrics Pvt. Ltd. [2010 (256) E.L.T. 369 (Guj.)]. It is submitted that the sale of surplus electricity to the AP Transmission Corporation and the availment of CENVAT credit in full on the inputs without reversing proportionate credit were suppressed by the respondent with intent to evade payment of duty. It is submitted that the relevant show-cause notice had clearly alleged such suppression against the respondent but they did not deny it in their reply to the notice. It is submitted that these aspects were overlooked by the learned Commissioner (Appeals) while setting aside the demand of duty for the extended period. Where the reason for invoking the extended period of limitation existed, the mandatory penalty under Section 11AC was also imposable on the respondent. It is submitted that this aspect was also not considered nor discussed by the appellate authority. It is submitted that the penalties were set asi....
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....ppeals). Therefore the question whether CENVAT credit on inputs used in the generation of electricity supplied to the AP Transmission Corporation during any part of the period of dispute does not survive. Moreover, this question stands settled against the respondent by the Hon'ble Supreme Court's judgment in the case of Maruti Suzuki Ltd. (supra). The main issue arising in this case is whether the first show-cause notice rightly invoked the extended period of limitation for recovery of duty. This show-cause notice inter alia alleged as follows: The assessee have not declared or brought to the notice of the department about the sale of the part of the power so generated out of the captive power plant in generation of which credit taken inputs are used as mentioned in previous paras. They have suppressed the fact of the sale of surplus power to APTRANSCO and have been availing credit of duty paid inputs without reversing proportionate CENVAT credit intentionally and thus contravening the provisions of CE Act 1944 and Rules made there under with an intent to evade payment of duty. Hence it appears that the extended period of limitation as provided under proviso to Sec 11A of CE Act 1....
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....ppression of facts by the respondent or contravention of legal provisions with intent to evade payment of duty is established against them, the demand for the larger period has got to be sustained. The learned Commissioner (Appeals) has recorded a finding to the effect that there was no suppression of facts by the respondent. This finding is factually baseless. That the auditors of the department from time to time gathered information from the respondent is a fact but the same just constituted knowledge of the department. It does not detract from the fact clearly alleged in para 10 of the relevant show-cause notice that the party suppressed the sale of surplus electricity to the AP Transmission Corporation. This fact was never disclosed to the department, whether in the periodical returns or otherwise. Even the respondent has no case that they had disclosed the sale of electricity to the corporation, to the department at any stage on their own. Apart from this, the allegation of suppression of fact/contravention of provisions with intent to evade duty, raised in the show-cause notice, was not denied by the respondent in their reply. For all these reasons, it has to be held that the....