2019 (3) TMI 949

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....emption from payment of duty on final products in terms of Notification NO.30/2004 dt. 9.7.2004. Pursuant to audit, it emerged that appellants had removed cenvat availed capital goods "as such" to their other units from June 2006 to December 2007, under invoice / delivery challan, without discharging the amount equal to the credit availed in respect of such capital goods as envisaged in Rule 3 (5) of the Cenvat Credit Rules, 2004. Hence a show cause notice dt. 25.08.2009 was issued to the appellants proposing demand of an amount of Rs. 1,04,35,038/- being cenvat credit originally availed on the capital goods cleared from their factory for contravention of provisions of Rule 3 (5) of CCR 2004. Notice also proposed imposition of interest liab....

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....iled on capital goods in such scenario, the subject demands are without the authority of law. v) Without prejudice to the above, demand of the entire credit availed by the appellant is not proper and the reversal has to be quantified after allowing 2.5% credit for every quarter of use. Reliance is placed on various case laws, including that of the Hon'ble Madras High Court in CCE Salem Vs Rogini Mills Ltd. - 2011 (264) ELT 367 (Mad.) While demanding the same, the credit reversed by the appellant for the inputs lying stock (which was not required during the relevant time as Rule 11 (3) came into force only from 1.3.2007 and the lapsed credit, shall be adjusted against the demand. vi) The demand is also hit by time bar. vii) For an e....

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....ay amount under Rule 3 (5) of the CCR is not correct as they are required to comply with requirement of both the Rule 11 (3) and Rule 3 (5). Therefore amount equal to the credit originally availed is to be paid for removal of capital goods as such in the present case. The plea of limitation does not find merit since removal of capital goods which have taken place in June 2006 to December 2007 was not informed to the department only after audit investigation did the entire matter came to light. 4. Heard both sides and have gone through the facts of the case. 5.1 We find merit in the contention of the appellants that the matter present proceedings are hit by time bar. From the facts on record, what comes to the fore is that the appellan....

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....icate and hence despatched the letter by post on 19.02.2008. Nonetheless, it is not clear from the narration or the statement as to on whose authority's advice did the appellant hold back despatch of the letter dt. 07.05.2007. Even the said letter has been received only on 20.02.2008, it contained all the necessary factoids regarding proposed shifting of machinery etc. by appellant. Even after 20.02.2008, department could very well have taken immediate action and issued SCN with alacrity. However, department still took more than a year and half for the SCN to be issued only on 25.08.2009. In the circumstances, when the facts of the matter were known to the department by 20.2.2008, suppression of facts cannot be alleged and in consequence, t....