TaxTMI 
TaxTMI 
2025 (12) TMI 3
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the appellant M/s. Lamba Timber Works Pvt Ltd is a registered assessee having Central Excise Registration with Kutch Commissionerate Central Excise Division Gandhidham for manufacturing of plywood and flush door. During the course of audit of the records of the appellant by the departmental officers, it was observed that the appellant had availed Cenvat Credit to the tune of Rs. 15,65,517/- comprising of additional duty of Customs of Rs. 12,10,801/- and special additional duty of Customs of Rs. 3,54,716/- on imported capital goods. It was further observed that the said capital goods were imported by them in the year 2007 under EPCG scheme by claiming exemption under Notification No. 49/2000-Customs dated 27th April, 2000, as amended. The appellant could not produce Export Obligation Discharge Certificate before the Competent Authority. It appeared to the Audit that since the Customs Duty, which was later on availed at Cenvat Credit, was paid by the appellant only after issuance of Show Cause Notice, therefore, the appellant was not eligible to avail the said Cenvat Credit in terms of exclusion provided in Rule 9 (1) (b) of the Cenvat Credit Rules, 2004. 1.3 Based on audit ob....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d of limitation on the ground of suppression of facts. However, they had shown the Cenvat Credit of the imported capital goods separately in the Cenvat Credit table prescribed in ER-1 returns. Therefore, the department had full knowledge that they had availed the Cenvat Credit in respect of imported goods. Therefore, the allegation that they never informed the department about the availment of said credit is wrong and without any basis. Since the department failed to prove the malafide intention of the appellant to evade the customs duty payment, the extended period cannot be invoked in the present case and the whole demand issued for the period from November-2014 to June-2017 is hit by limitation. The learned Counsel for the appellant also argued that the penalty under Section 11 AC of the Central Excise Act, 1944 is not imposable and extended period of limitation cannot be invoked under Section 11A(4) of the Central Excise Act. He has argued that the impugned order passed by the learned Commissioner be set aside and the appeal may be allowed. 3. The learned Authorised Representative for the department submitted that the customs duty was paid by the appellant following detectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Excise Act, or of the Customs Act, 1962 (52 of 1962) or the rules made thereunder with intent to evade payment of duty. Explanation. - For removal of doubts, it is clarified that supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under section 3 of the Customs Tariff Act;" From the provisions of Rule 9 (1) (b) of the Central Credit Rules, 2004 it is clear that a person shall not be permitted to avail Cenvat Credit of additional amount of duty which became recoverable from the manufacturer or importer of inputs / all capital goods on account of any non-levy or short levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Excise Act or of the Customs Act, 1962 or the Rules made thereunder w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Credit of Rs. 15,65,517/- on imported capital goods in terms of Cenvat Credit Rules, 2004. They had imported capital goods under EPCG scheme by claiming exemption benefit under Notification No. 49/2000-Customs dated 27th April, 2000 but due to unfortune circumstances, they failed to fulfil statutory obligations prescribed under the Customs Act, 1962 and failed to pay customs duty within prescribed time. However, there was no willful mis-statement for evasion of customs duty. 4.4 I am of the view that when all the facts were produced before the department in the form of ER-1 returns and it is not the case of the department that the facts mentioned in the ER-1 returns were wrong or false therefore, though the appellant failed to pay the customs duty in accordance with provisions of Customs Act, but it cannot be said that it was done by malafide intention to evade the Customs Duty payment. 4.5 For the proposition that once the taking of the Cenvat Credit was disclosed in the ER-1 return, there cannot be any wilful misstatement or suppression on the part of the assessee, I rely on the decision of Hon'ble Gujarat High Court in case of Dynamic Industries Ltd. reported in 2014 (35....