M/S. Trikoot Iron & Steel Casting Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. MRT-EXCUS-000-APP-144-13-14 dated 28/11/2014 passed by Commissioner of Central Excise (Appeals) Meerut (UP)]

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. Trikoot Iron & Steel Casting Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

Meerut I

Appearance:

Shri Alok Arora, Advocate for the Appellants

Shri Devender Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 11. 5.2015

ORDER NO. FO/ /2015 SM

Per Ashok Jindal :

The appellant is in appeal against the impugned order denying the Cenvat credit on steel items like HR plates, HR coil, sheet, plate and shape & section etc. as capital goods as these are not specified items under Rule 2(a) of Cenvat Credit Rules, 2004.

2. The facts of the case are that the audit was conducted in the factory of the appellant in 2008. On the basis of audit, a letter was written to the appellant by Range office on 21.4.09 to reverse the Cenvat credit along with interest on the items namely, HR sheets, coil, shape and section etc. The appellant vide their letter dated 2.11.2009 replied that these items were used in plant and machinery. Thereafter, a show cause notice dated 14.12.2011 was issued to the appellant to deny Cenvat credit on the above said items by invoking extended period of limitation. The show cause notice was contested by the appellant. Both the lower authorities have denied the Cenvat credit to the appellant. Aggrieved from the said order, appellant has filed the appeal on merits as well as on limitation against the impugned order before me.

3. Learned Counsel for the appellant submits that they are having good case on limitation. Therefore, they are not arguing the merits of this case at this stage. He submits that audit took place in 2008 and on the basis of that audit, letter was issued to them for reversal of Cenvat credit availed on 21.4.2009 which was replied by the appellant on 2.11.2009. But show cause notice has been issued on 14.12.2011 which is highly time barred. Therefore, demands are not sustainable in the light of decision of High Court of Allahabad in the case of CCE vs. Triveni Engineering & Industries Ltd. [ 2015 (317) ELT 408 (All) ]. Therefore extended period of limitation is not invokable and consequently impugned order qua demand of duty along with interest and imposition of penalty be set aside.

4. On the other hand, learned AR strongly opposed the contention of learned Counsel and submits that the appellant has taken inadmissible Cenvat credit without informing to the department and it is only during the course of audit, it came to the knowledge of the department that they have taken the Cenvat credit on the impugned items which are neither inputs nor capital goods. Therefore, they have suppressed the material fact. He further submits that facts in Triveni Engineering & Industries Ltd.(supra) are not relevant in the facts of present case as in this case there was an allegation that party has suppressed available information with intent to avail inadmissible cenvat credit. Therefore the limitation period is invokable. Such allegation was not there in the case of Triveni Engineering & Industries Ltd.

5. Heard the parties. Considered the submissions.

6. I find in the show cause notice and impugned order on one side, the Revenue is alleging that appellant has wrongly taken cenvat credit and on the other hand it is alleged that they have suppressed the facts. If it is a case of wrong availment of cenvat credit then question of suppression does not arise. Further in the case of Triveni Engineering & Industries Ltd. (supra), the facts of the case are as under:

3.?Having heard the learned counsel for the appellant on merit, we find that a show cause notice was issued under Section 11A of the Central Excise Act, 1944 alleging that the assessee for the period 2006-07, 2007-08 and 2008-09 had wrongly taken/utilized Cenvat Credit amounting to Rs. 13,35,804/-. We find that an audit was conducted in the month of March, 2010 and a show cause notice was issued in January, 2012, i.e. after a gap of 22 months. The issue with regard to misstatement or suppression of fact came to the knowledge of the department at the time when the audit was conducted in the month of March, 2010. Under Section 11A of the Act, a notice can be given within one year from the relevant date. In the instant case, the notice was given after 22 months i.e. much beyond the period of limitation.

7. The Honble High Court of Allahabad has observed as under:

5.?We are of the opinion that the proviso to Section 11A is not applicable because the show cause notice does not indicate that there was deliberate act of suppression of fact, fraud, mis-statement, etc. committed by the assessee. Mere act of omission by the assessee without there being any intention to evade payment of tax cannot be a ground to invoke the proviso to Section 11A of the Act, especially when the evasion came to the notice of the department when the audit was conducted in the month of March, 2010.

6.?In the light of the aforesaid, mere suppression of facts without there being a deliberate act of fraud, etc. with the intention to evade payment of duty cannot entitle the department to invoke the proviso to Section 11A of the Act.

8. In this case also, the allegation against the appellant is that they have availed wrong cenvat credit and action of appellant is suppression of facts. In the show cause notice it was mentioned that the availment of cenvat credit on these items has been explained by the appellant with an evidence and was supported by certificate issued by Chartered Engineer for usage of items in capital goods which both the lower authorities have not accepted. From the above, the only inference can easily be drawn that it is appellants case that the impugned items have been used for fabrication of capital goods and to that extent certificate issued by Chartered Engineer was produced which was doubted by both the lower authorities. Therefore, inference of suppression of facts cannot be drawn. Therefore, after relying on the decision of Triveni Engineering & Industries Ltd. (supra) I hold that in this case the allegation of suppression of facts is not sustainable against the appellant. Consequently, extended period of limitation is not invokable.

9. With these terms, I hold that demands against the appellant are barred by limitation. Consequently, 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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