TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 571
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....entral Excise Officers, on investigation, noticed that the appellant had, during the period from March 2011 to December 2011, availed cenvat credit on "Drilling rigs mounted on motor vehicle" falling under central excise tariff heading No.8705 of Central Excise Tariff Act, 1985 which does not fall under the purview of the definition of capital goods under Rule 2(a)(A) of the Cenvat Credit Rules, 2004 (CCR). Pursuant to a show cause notice dated 30.12.2013 issued, after due process of law, the adjudicator confirmed the demand of recovery of cenvat credit availed on the said item as capital goods, amounting to Rs.27,94,850/- invoking the extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 along with applicable interest and imposed equivalent penalty under Rule 15(3) of the Cenvat Credit Rules,2004 read with first proviso to Section 78 of the Act ibid. Aggrieved by the said Order, the appellant preferred an appeal before the Commissioner of Central Excise (Appeals-I), who, however, vide the impugned OIA, upheld the order of the adjudicator. Aggrieved by the said OIA, having preferred this appeal, the appellant is before this forum. 3. Shri. I Dinesh,....
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....verring that along with the return copy, they had filed copies of the invoices based on which they had taken the input credit for the Superintendent's records. It is further submitted that after a span of more than six months, another letter dated 30-01-2012 was issued seeking the very same details of cenvat credit availed. The Ld. Counsel goes on to submit that, subsequently in the month of June 2012, the appellant was also audited by the internal audit party. 5. Ld. Counsel further submits that after an elapse of a year and a half, a show cause notice (SCN) was issued invoking extended period of limitation and alleging that the cenvat credit taken on the drilling rigs supplied by PRD Rigs India P Ltd is ineligible on the ground that the said goods are classified by the supplier under chapter heading 8705 of the Central Excise Tariff Act and is thus excluded from the definition of 'capital goods' under Rule 2(A)(a)(i) of CCR. The Ld. Counsel submits that under the aforesaid facts and circumstances, the extended period of limitation could not have been invoked as no positive act has been attributed to the appellant which is a prerequisite for invoking the extended period under pro....
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....nation are whether the cenvat credit availed by the appellant on the excise invoices issued by PRD Rigs India Private Limited classifying the drilling rigs under central excise tariff heading 8705 is tenable on merits, and also whether the demand confirmed is barred by limitation. 9. We notice that during the relevant period, the definition of "capital goods" under Rule 2(a)(A)(i) of the Cenvat Credit Rules, 2004, stipulated that "capital goods" means the following goods namely, all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act. Thus, indisputably, the goods falling under central excise tariff heading 8705 were not covered under the definition of "capital goods" as defined in Rule 2(a)(A)(i) of the Cenvat Credit Rules, 2004 during the relevant period. While Rule 3(1) of the CCR allowed a provider of taxable service to take cenvat credit of the specified duties paid inter-alia on the capital goods received in the premises of the provider of output service, however, as per Rule 9 (1) of the CCR, it is inter-alia, an invoice iss....
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....that has been shown to us which would enable the goods or services recipient to contend that the classification of goods or services ought to be different from that which has been stated by the manufacturer/supplier, and then go on to avail the benefit of cenvat credit under such proposed classification. Perhaps the cause of the appellant may have been best served had the various contentions advanced by the appellant as to why the goods supplied by PRD Rigs India Private Limited, were in fact classifiable under Chapter 84, were convincingly raised before the jurisdictional authorities of PRD Rigs India Private Limited and the invoices rectified/endorsed appropriately. Therefore, we are unable to agree with the appellant's contention that the classification was incorrectly done by the supplier and the goods supplied under the cover of the invoice issued by the supplier/manufacturer PRD Rigs India Private Limited, were in fact classifiable under Chapter 84 of the Central Excise Tariff Act. For the said reasons, we are also disinclined to embark on an attempt to re-determine the classification of the said goods received by the appellant as we have been urged to do which would be oppos....
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....osed. In these circumstances, when there is nothing more that has been revealed as a positive act of wilful misstatement or suppression of facts with intent to evade payment of duty that has come to light or evidenced, we are of the considered opinion that the show cause notice dated 30-12-2013, raising demand of cenvat credit on capital goods taken during the period from March 2011 to December 2011, could not thereafter have been issued invoking the extended period of limitation. 12. That apart, we also find that in the said SCN dated 30-12-2013, the extended period of limitation was invoked solely on the allegation that the fact of wrong availment of the impugned cenvat credit would not have come out but for the investigation conducted by the officers. It is evident that the SCN itself does not put the appellant to notice of any positive act of wilful misstatement or suppression of facts with intent to evade payment of duty, which the appellant is called upon to answer. It is a settled position in law by a catena of decisions that the Revenue has to establish the existence of the ingredients necessary to invoke the extended period of limitation as stipulated in the proviso to Se....