C.C.E. Raipur vs M/S. Hanuman Agro Industries Ltd

[Arising out of Order-in-Appeal No. 155-RPR-I-2012 dated 15.10.2012 by the Commissioner of Central Excise (Appeals), Raipur].

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

C.C.E. Raipur .Appellants

Vs.

M/s. Hanuman Agro Industries Ltd .Respondent

Appearance:

Ms. Ranjana Jha, DR for the Appellants

Shri R.K. Thakur, Authorized representative for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 19.01.2015

FINAL ORDER NO.50259/2015-EX(SM)

Per Ashok Jindal:

The revenue is in appeal against the impugned order wherein the Ld. Commissioner (A) held that extended period of limitation is not invokable.

2. The facts of this case are that acting on the intelligence an investigation was conducted at the factory of the respondent on 15.09.2010 and it came to the knowledge that during the period Oct 2005- Jan 2006 the respondent has availed Cenvat Credit on items like Joist, M.S. Angles, Channel, CTD Bars, Plant and Cement etc. which were used by them for construction / fabrication / erection of supporting structures of power plant as capital goods. Thereafter, the show cause notice was issued to the respondent dated 04.10.2010 denying Cenvat Credit on these items as these items are neither inputs nor capital goods. Adjudicating Authority confirmed demand along with demand and interest and imposed the penalty. An appeal was made before the Ld. Commissioner (A). The Ld. Commissioner (A) held that on merits the respondent have no case but on limitation they are having a case as the demand has been confirmed against the respondent by invoking the extended period of limitation. Against the said order revenue is in appeal.

3. The Ld. AR submits that in impugned order on merits respondent have no case. But on limitation she submits that it is only at the time of investigation on 15.09.2010 the department came to know that the respondent has taken the Cenvat Credit on the above disputed items as capital goods and in their ER1 returns they were not manufacturing any capital goods. Therefore, availment of Cenvat Credit came in the knowledge of the department only on 15.09.2010 and thereafter a show cause notice was issued on 04.10.2010 which is well within time. Therefore, impugned order held extended period of limitation is not invokable is required to be set aside.

4. On the other hand, Shri R K Thakur authorized representative of the respondent appears and submits that respondent are filing regular ER1 returns and also filing details as per rule 7 of Cenvat Credit Rules, 2004 for availment of Cenvat Credit on the above items in due course. If the respondent has taken credit on these items which was not entitled to them at that time, department has to take action against the respondent but no action has been taken by the department on the declarations. Therefore, extended period of limitation is not invokable. He further submits that the proceedings were initiated against the respondent only after the decision of larger bench of this Tribunal in the case of Vandana Global Vs C.C.E. 2010 (253) E.L.T. 440 (Tri-LB). Therefore show cause notice was not required to be issued. He further submits that audit took place in 2005 and subsequently in 2007 but at the time of audit conducted by the department nothing was pointed out by the audit for wrong availment of Cenvat Credit by the respondent on the above items.

5. Heard the parties. Considered the submissions.

6. In this case Cenvat Credit on the disputed items mentioned in para 1 above was taken by the respondent during the period October 2005  January 2006. I also find that two audits were conducted between Dec 2005 2007. At that time no objection was raised for wrong availment of Cenvat Credit on the impugned items. Further, I find that respondent are filing their ER return regularly saying that they are taking Cenvat Credit on these items as capital goods. All these records were accepted by the department without any objection. When the wrongful availment of Cenvat Credit came in the knowledge of the department at the time of availment of Cenvat Credit, therefore, it cannot be said by the department that department was not having any knowledge of the wrongful availment of Cenvat Credit. Further, I find that a letter dated 15.09.2010 was issued to the respondent for denial of inadmissible Cenvat Credit on structural items in the light of the decision of the larger bench of this Tribunal in the case of Vandana Global (Supra) and said letter is accepted as produced below:

7. From the perusal of that I find that the Cenvat Credit sought to be denied in pursuance of the order of the larger bench of this Tribunal in the case of Vandana Global. In these circumstances, I hold that Ld. Commissioner was rightly holding that extended period of limitation is invokable as show cause notice was issued in 2010 for the period of Oct 2005-Jan2006.

8. Therefore, I do not find any infirmity with the impugned order, same is upheld. Therefore appeal filed by the revenue is dismissed.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

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E/4140/2012-EX(SM)