M/S. Arofine Polymers Ltd vs Commissioner Of Central Excise, Pune

Customs Excise and Service Tax Appellate Tribunal12 May 2015

CitationAPPEAL NO. E/147/12-MUM

Ratio decidendi

The rule this decision rests on

Where a demand for Cenvat credit rests on an issue of interpretation of the Cenvat Rules, on which the Tribunal's own decisions had conflicting views and the matter was pending before a Larger Bench, the assessee's availing of credit on the basis of a Tribunal judgment allowing such credit is a bona fide belief; the mere taking of credit in such circumstances does not amount to suppression of facts or wilful misstatement, and so the proviso to Section 11AC of the Central Excise Act, 1944 is not attracted. Consequently, where the show cause notice invoking the extended period of limitation was issued beyond the normal one-year period and the ingredients of suppression or misstatement are absent, the demand is barred by limitation and is not sustainable, and the Tribunal need not examine the merits of the case.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNALWEST ZONAL BENCH AT MUMBAICOURT NO. IIAPPEAL NO. E/147/12-MUM

[Arising out of Order-in- Appeal No. PI/RKS/153/2011 dtd. 8/11/2011 passed by the Commissioner (Appeals), Central Excise Pune-I]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No 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 : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Arofine Polymers Ltd. : Appellants

Commissioner of Central Excise, Pune-1. : Respondent

Appearance

Ms. Padmavati Patil, Advocate for the Appellant Shri. V. K. Shastri, Asstt. Comissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 12/5/2015 Date of decision: 12/5/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Appeal No. PI/RKS/153/2011 dtd. 8/11/2011 passed by the Commissioner (Appeals), Central Excise Pune-I, wherein Ld. Commissioner (Appeals) upheld the order in original dated 28/6/2011 passed by Asstt. Commissioner, Central Excise, Pune Division and appeal filed by the appellant was rejected. The fact of the case is that the appellant have availed Cenvat Credit on Angles, Channels, Tubes Rails, etc. and this material they used for fabricated platform which inturn used for Erection of reactors which is capital goods. The appellant has availed the Cenvat credit on such material considering it as input; it is used in the fabrication of Platform and excise duty discharged on the platform. Show cause notice was issued proposing denial of Cenvat credit and in the adjudication the demand of Cenvat Credit amounting to Rs. 4,53,521/- and equal amount of penalty and interest was demanded. Aggrieved by the said order-in-original dated 28/6/2011, appellant preferred appeal before the Commissioner(Appeals) who upholding the order-in-original rejected the appeal. Hence the appellant is before me.

2. Ms. Padmavati Patil, Ld. Counsel for the appellant submits that show cause notice was issued proposing denial of Cenvat Credit on the basis of Larger Bench decision in the case of Vandana Global Ltd. Vs. Commissioner of C. Ex., Raipur[2010(253) E.L.T.440(Tri-LB)]. She submits that ratio of the Vandana Global Ltd. case is not applicable in the present case for the reason that the appellant has taken credit on the steel material as input which has been directly used in the fabrication of platform which is used for erection of reactors within the factory of the appellant. Since the appellant has discharged excise duty on the platform treating it as excisable goods, the Cenvat credit in respect of such steel material is admissible. Hence Vandana Global Ltd. judgment not relevant in the present case. She further submits that the show cause notice has invoked extended period inasmuch as show cause notice was issued on 16/11/2010 for the period Jun 2007 to March 2008 therefore the show cause notice barred by limitation. She submits that at the time of taking credit there were judgments of this Tribunal wherein Cenvat Credit was allowed on the identical goods and due to the conflicting judgments matter was referred to the Larger Bench in case of Vandana Global Ltd. It is her submission that under this position of law extended period for demanding Cenvat credit is not correct. In support of her submission she placed reliance on following judgments:

(a) Commissioner of C. Ex. Cus. & S.T. Daman Vs. N.R. Agarwal Industries[2014(300)E.L.T. 213(Guj.)].

(b) ITC Ltd. Vs. Commissioner of Central Excise, Salem [2012(285) E.L.T. 291(Tri. Chennai)]

(d) Commissioner of Central Excise, Raipur, Vs. Rajaram Maise Products [2010(258) E.L.T. 539(Tri-Del.)]

3. On the other hand, Shri. V. K. Shastri, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.

4. I have carefully considered the submissions made by both sides and perused record.

5. Before going into merit, I observe that the show cause notice has invoked extended period of demand as same was issued beyond normal period of one year as provided under Section 11AC and its proviso of Central Excise Act, 1944. The credit was disputed by the Revenue on the basis of judgment in the case of Vandana Global Ltd. of Larger Bench of this Tribunal. Prior to reference of this Vandana Global Ltd case to the Larger Bench of this Tribunal, in various judgments the Tribunal allowed the credit of structural steel item and thereafter one of the the Division Bench of this Tribunal had contrary view and matter was referred to the Larger Bench. Under this position of law on the issue of Cenvat Credit in respect of structural steel items assessee had bonafide belief and rather bound by the judgment of this Tribunal wherein Cenvat Credit was allowed therefore it cannot be alleged that the appellant has suppressed the fact or any ingredient as provided under proviso to Section 11AC is applicable in the fact and circumstances of the case. The case of N.R. Agarwal Industries, Honble Gujarat High Court has held that longer period of limitation is not invokable in the case of Cenvat Credit availed in respect of goods namely Angles, Channels, Tubes Rails etc. In all other judgments cited by the Ld. Counsel, this Tribunal has taken consistent view that since admissibility of Cenvat credit in respect of structural steel items is an issue of interpretation of Cenvat Rules, therefore extended period of limitation is not invokable. In view of the above discussion, I am of the considered view that the demand being covered under the extended period is hit by limitation, hence not sustainable; the same deserves to be set aside. I therefore set aside the demand being time bar. Since the appeal is disposed of on the ground of time bar, I am not going into the merit of the case. The appeal is allowed.

(Dictated and pronounced in court)

Ramesh Nair Member (Judicial)

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