M/S. Bilti Rite Packaging P Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. JAL-EXCUS-000-APP-013-13-14 dated 27.6.2013 passed by Commissioner of Central Excise (Appeals), Chandigarh]

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?

M/s. Bilti Rite Packaging P Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Chandigarh II

Appearance:

Shri J P Kaushik, Advocate for the Appellants

Shri Devender Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 20.1.2015

FINAL ORDER NO. A/ 50253/2015-Ex(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order wherein duty along with interest and penalty is imposed on the appellant.

2. The facts of the case are that appellant was registered with Central Excise department and availing the Cenvat Credit on inputs and clearing the goods on payment of duty. With effect from 1.4.06 the appellant opted to avail exemption under notification No. 8/03 being the SSI unit and filed a declaration before the department. As per Rule 11(2) of Cenvat Credit Rules, 2004, the assessee is required to reversed the Cenvat Credit attributable to inputs, work in progress and finished goods in their stock on the date of opting exemption under notification No. 8/03. Admittedly, the appellant has not reversed the Cenvat Credit, but the appellant had filed regular return for quarter ending December, 2006, showing that they have not utilized the Cenvat Credit and not reversed the same. Later on, audit took place on 18.3.10 and it was found that appellant did not discharge their obligation as per Rule 11(2) of the Cenvat Credit Rules, 2004. Thereafter a show cause notice dated 5.5.11 was issued to the appellant to demand duty equivalent to the Cenvat Credit reversible by them as on 31.3.2006. The matter was adjudicated. Demand of duty was confirmed without giving credit to the extent Cenvat Credit lying in their account along with interest and equivalent amount of penalty. On appeal learned Commissioner (Appeals) gave the benefit of Cenvat Credit lying unutilized in their account and balance amount of duty has been confirmed along with penalty of equivalent amount. Aggrieved from the said order, appellant is before me.

3. Learned Counsel for the appellant fairly submits that on merits they have no case but on limitation they have good case as they have filed declaration on 1.4.06 for opting exemption under notification No. 8/03. Although duty cast on the appellant to discharge their obligation as per Rule 11(2) of the Cenvat Credit Rules, 2004 but they did not discharge their obligation and the show cause notice issued on 5.5.11 is barred by limitation as the same has been issued after 5 years of filing declaration by them. Therefore, extended period of limitation is not invokable. To support this contention, he relied on the decision of Honble Madras High Court in the case of Muhammed Ismail Mills vs. CESTAT, Chennai [ 2015 (315) ELT 404 (Mad)].

4. On the other hand, learned AR submits that the appellant has not discharged their obligation under Rule 11(2) of Cenvat Credit Rules, 2004 and it came to the notice of the department only when audit took place on 18.3.2010. Thereafter the show cause notice was issued on 5.5.11 which is well within the time of 5 years as the non reversal of Cenvat Credit came to the knowledge of the department only on 18.3.2010. Therefore non reversal of Cenvat Credit was suppressed by the appellant from the department. He also relied upon Neminath Fabrics Pvt. Ltd. [2010(256) ELT 369 (Guj)] and Raymods Ltd. vs CCE Mum [2011 (273) ELT 582 (Tri)].

5. Heard the parties, Considered the submissions.

6. In this case, admitted facts are that appellants filed a declaration for availing exemption under notification No. 8/03 on 1.4.2006. Although an obligation is being cast on the appellant to discharge their obligation as per Rule 11(2) of Cenvat Credit Rules, 2004 but when the appellant filed the declaration for opting the exemption. Now the duty cast on the department to verify whether they have discharged their obligation for availing the exemption or not which was not done by the Revenue within time. Thereafter in 2010, an audit took place and it was came to the knowledge of the department that the appellant has not discharged their obligation under Rule 11(2) of Cenvat Credit Rules 2004. Thereafter a show cause notice was issued on 5.5.11 which is also beyond the normal period of limitation. Admittedly in this case, show cause notice has been issued after 5 years of filing the declaration by the appellant. Therefore relying on the decision of Muhammed Ismail Mills (supra), I hold that show cause notice is barred by limitation. In these terms, impugned order is set aside. Appeal is allowed with consequential relief, if any.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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