Kalyani Gerdau Steels Ltd vs Commissioner Of Central Excise, ...

E/3305/2012-SM [Arising out of Order-in-Appeal No. 51-2012 (T) CE dated 12/09/2012 passed by Commissioner of Central Excise (Appeals), Guntur]

For approval and signature:

HON'BLE SMT ARCHANA WADHWA, JUDICIAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

KALYANI GERDAU STEELS LTD JAMBULAPADU VILLAGE, TADIPATRI MANDAL ANANTPUR DIST AP 515411 Appellant(s)

Versus

Commissioner of Central Excise, Customs & Service Tax TIRUPATI 9/86-A...BEHIND WEST CHURCH COMPOUND, AMARAVATHI NAGAR, M.R.PALLI, - 517502 AP Respondent(s)

Appearance:

Mr. M.S. Nagaraja, Adv

T. RAJESWARA SASTRY & ASSOCIATAES. # 48, 11TH MAIN ,BANASHANKARI, 2ND STAGE, BANGALORE - 560070 KARNATAKA For the Appellant Mr. R. Gurunathan, A.R. For the Respondent

Date of Hearing: 08/07/2015

Date of Decision: 08/07/2015

CORAM:

HON'BLE SMT ARCHANA WADHWA, JUDICIAL MEMBER

Final Order No. 21656 / 2015

Per : ARCHANA WADHWA

Vide impugned orders, an amount of Rs. 31,05,981/- stands confirmed against the appellant by denying the CENVAT credit availed during the period 1996-99 and 2004. The denial of credit pertains to capital goods (steel structurals) which were used by the appellant to fabricate a blast furnace. The factory was set up in 2004 and trial production was started in February 2004. The show-cause notice in this case was issued on 12/09/2008 seeking to recover the aforesaid amount under Section 11A(1) of the Central Excise Act read with Rule 14 of the CENVAT Credit Rules 2004, along with interest and to impose penalty under Section 11AC of the Act read with Rule 15(2) of the CENVAT credit Rules 2004. The demands were confirmed against the party by the original authority and the latter's order has been sustained by the Commissioner(Appeals).

2. The learned counsel for the appellant submits that the entire demand is without jurisdiction inasmuch as the provisions invoked in the show-cause notice are not applicable to the main period of dispute. He further submits that the material facts were disclosed to the Department by the appellant in a detailed letter dt.10.05.2004. A full statement of the MODVAT credit was also furnished with that letter. Therefore, the demand raised on 12/09/2008 is heavily time-barred.

3. We have heard the learned A.R. also who submits that the first return filed by the party was for the month of February 2005 and the same showed the opening balance as 'nil'. Contextually, he also submits that the endorsements made by the Range superintendent on the letter submitted by the party on 10/05/2004 has no legal validity and hence it should be held that the appellant has suppressed material facts by showing nil opening balance in the return filed for February 2005.

4. After considering the submissions, we have found a good case for the appellant mainly on the ground of limitation. It is on record that the appellant disclosed the material facts to the Department on 10/05/2004 and that the Range Officer noted the total accumulated MODVAT credit as available to the party.

5. The said fact reflects upon the appellants bonafide and lack of any positive action on the appellant to suppress the material facts with a malafide mind. As the appellants have disclosed the entire facts to the Revenue, we are of the view that the demand raised by invoking longer period of limitation cannot be held sustainable.

6. Otherwise also we find that the credit has been sought to be denied on the basis of the larger bench decision of the Tribunal in the case of Vandana Global Ltd. reported as [2010 (253) ELT 440 (LB)].

7. In the case of similar situate appellants, involving the same issue Tribunal in number of decisions has held that inasmuch as during the relevant period, the law was declared in favour of the assessee, and was reversed only subsequently , no malafide can be attributed to the manufacturer assessee so as to justifiably invoke the longer period of limitation. Reference can be made to the following decisions:

1) Continental Foundation Joint Venture v. CCE, Chandigarh-I [2007 (216) ELT 177 (SC)]

2) Jaiprakash Industries Ltd. v. CCE, Chandigarh [2002 (146) ELT 481 (SC)]

3) M/s. High Tech Equipments & Spares Pvt. Ltd. Final Order No. A/58186/2013-SM[BR] dated 05.11.2013

4) CCE, Raipur v. Baldev Alloys Pvt. Ltd [2012-TIOL-388-CESTAT-DEL]

5) CCE, Raipur v. Orion Ferro Alloys Pvt. Ltd. [2010 (259) ELT 84 (Tri.)]

6) CCE, Raipur v. Rajaram Maize Products [2010 (258) ELT 539 (Tri.)]

The Appeal is accordingly allowed on the point of limitation.

(Order pronounced in open court)

ARCHANA WADHWA JUDICIAL MEMBER

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