TaxTMI 
TaxTMI 
2020 (12) TMI 875
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding Central Excise Registration and availing CENVAT Credit in respect of inputs used in the manufacture of impugned goods. 3. A show cause cum demand notice No. 12/Commr/BST/DGP Audit/ 2018 dt. 07.05.2018 was issued to the appellant under CNo. V(15)275-SCN/BST/Tech/DGP Audit/ Part-1/2018/4696 dt. 08.05.2018 (Annexure 'A') wherein it was alleged that:- i) An audit was conducted from 28.04.2015 to 01.05.2015 for the period 2013-14 by the department at appellant's factory premises. On scrutiny of documents it was observed that a difference appeared in purchase value of raw material in balance sheet as compared to ER-1 returns thereby resulting in excess availment of CENVAT Credit on inputs. In the audited balance sheet of the appellant for the financial year 2013-14, the purchase amount of material consumed has been shown as Rs. 260,32,34,295/-, whereas the price of raw material consumed by the appellant, calculated from the total CENVAT Credit availed by them as shown in their ER-1 returns for the financial year 2013-14 comes to Rs. 278,92,71,570/- by using the following formula :- Price of raw material = Total CENVAT Credit availed on inputs as per ER-1 x 100 / 12.36 ii) It ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CENVAT Credit, by suppressing the facts from the department with clear intention to evade payment of duty. 5. The appellant submitted reply to show cause notices vide their letter dt. 01.10.2018 and inter-alia denied the allegation made in show cause notice. The appellant contested the demand of duty besides assailing extended period of limitation and penal provisions. 6. The Ld. Commissioner decided the case vide the impugned order and demanded duty of Rs. 4,94,94,638/- under section 11A(10) of the Central Excise Act, 1944 along with interest under the proviso to Rule 14 (1) (ii) of CENVAT Credit Rules, 2004 read with section 11AA of the Central Excise Act, 1944. A penalty of Rs. 4,94,94,638/- was also imposed under proviso to Rule 15 (2) of CENVAT Credit Rules, 2004 read with section 11AC (1) ( c) of the Act. 7. Being aggrieved, by the impugned order, the appellant has filed the present appeal on the grounds as stated in the Memorandum of Appeal. 8. Sh. Sudhir Malhotra, Advocate the Ld. Counsel for the appellant submits that department has worked out excess availment of CENVAT credit based on reverse calculation i.e. the value of raw material consumed has been arrived from th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... issue involved in this case is whether the appellant had taken excess CENVAT credit as arrived by the department, holding that it was paper transaction without or short receipt of raw materials. The second issue is whether in the circumstances and the facts on record, extended period of limitation can be invoked. 12. We find that the excess CENVAT credit has been computed based upon audit objection and the audit has worked out the excess CENVAT credit by arriving at value of raw material consumed from CENVAT credit taken and shown in ER-1 returns for the financial year by applying the formula as under: Price of raw material consumed = total cenvat credit availed on inputs as per ER-1 x 100 / 12.36 or 12.50 13. The value so arrived was compared with the value of raw material consumed as shown in the Balance Sheet of respective financial year. We find that ER-1 return shows the amount of CENVAT credit taken on the quantity of raw material purchased and not on the quantity of raw material consumed. There is no provision for one to one correlation in CENVAT credit scheme. The appellant also received credit note on quantity discount from suppliers and also issued debit note in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Cenvat credit. Therefore, I hold that show cause notice is defective for want of evidence, i.e., invoices and it is not coming out from the investigation whether the Cenvat credit account has been verified to the corresponding invoices or not. Therefore, quantification of duty admissible on Cenvat credit on the strength of balance sheet figures is incorrect. Therefore, the charge of availment of excess Cenvat credit on the appellant is not sustainable. Consequently, Cenvat credit availed by the appellant cannot be denied in the absence of any supportive evidence. In these circumstances, the Cenvat credit availed by the appellant is correct. Consequently, duty along with interest, entire demand and penalties are not imposable. With these observations, impugned order is set aside. Appeals are allowed with consequential relief, if any." 14. We are fully in conformity with the findings in the above said case law and it squarely covers the case in hand. 15. We find that the total demand has been computed by applying extended period of limitation in terms of Section 11A of Central Excise Act, 1944. The said section prescribes conditions under which extended period of limitation can....