Custom, Excise & Service Tax Tribunal
M/S.Jyoti Copper Craft Pvt.Ltd vs Cce, Indore on 7 October, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEMBER BENCH
Court No.III
Appeal No. E/55994/2014-Ex-SM
(Arising out of OIA No.IND/CEX/000/APP/169/2014 dt.1.8.14 passed by the CCE(Appeals), Indore)
Date of Hearing: 28.09.2015
Date of Order: 07.10.2015
For approval & Signature:
Honble Smt.Sulekha Beevi C.S., Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would 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 Department Authorities?
Yes
M/s.Jyoti Copper Craft Pvt.Ltd. Appellant
Vs.
CCE, Indore Respondent
Appearance:
Present for the Appellant: Shri Manish Saharan,Advocate Present for the Respondent: Shri M.R.Sharma, AR Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial) Final Order No.53100/2015 Per: Sulekha Beevi C.S. The appellants are engaged in the manufacture of copper articles falling under chapter 74 of CETA, 1985. They were availing the facility of Cenvat Credit. The factory premises of the appellant was visited and searched by the officers of Central Excise on 13.12.2007 and certain documents were seized. On 2.1.2008, the officers again visited the factory premises and observed that the appellant had wrongly availed credit on 2 scalping machines on the invoice dated 23.3.2007. Though the appellant had availed credit on these machines, the machines were not available in the factory. On pointing out this, the appellant reversed the credit and informed the same to the department vide letter dated 9.1.2008. The appellant had also informed that credit had been availed on one Draw Bench machine which was not received in the factory and therefore the appellant reversed the credit involved on their own. Later, in 2011 a summons was issued to the production manager of the appellant. His statement was recorded. Thereafter the show cause notice dated 29/30.12.2011 was issued to the appellant alleging wrongful availment of credit Rs.3,86,168/- on the above three machines. The notice culminated in the Order-in-Original which confirmed the demand and ordered appropriation of cenvat credit reversed alongwith interest besides imposing equal amount of penalty. In appeal, the Commissioner (Appeals) upheld the same. Aggrieved the appellant is before this Tribunal.
2. Learned Counsel for the appellant argued both on the issue of limitation as well as on merits of the case. With regard to the issue of limitation, learned Counsel urged that the fact was in the knowledge of the department on 2.1.2008 itself and the show cause notice issued after four years is barred by limitation. It is submitted that on pointing out, the appellant had reversed the credit and intimated the department on 9.1.2008, itself alongwith details showing credit balance. It is the case of the appellant that only to escape from the delay the summons was issued to the production manager and the statement was recorded. Learned counsel clarified that the credit was reversed before it was utilized therefore it would amount to not taking credit. That there was no wilful mis-statement or suppression of facts with intention to evade payment of duty and therefore the extended period is not invokable. To fortify his argument, he relied upon the decision of Honble Gujarat High Court in CCE, Vadodara-II vs. Dynaflex Pvt.Ltd.-2011 (266) ELT 41 (Guj.) and Orissa Bridge & Construction Corpn.Ltd. vs. CCE, Bhubaneswar-2011 (264) ELT 14 (SC).
3. Per contra, learned AR reiterated the findings in the impugned order. It is submitted that the appellant though reversed the credit but did not pay the interest. Further, the fact that wrongful availment of credit would not have come to light without search and visit conducted by the officers of the department. Though the appellant stated in their letter dated 9.1.2008 that the machines were yet to be installed in the factory, the production manager in his statement dated 22.3.2011 stated that the credit was reversed because the machines were not available in the factory premises. That it is evident that the appellant had availed credit against the capital goods, namely, one draw bench machine and two scalping machines merely on the basis of invoices of the supplier without physical receipt of these goods in the factory premises. Therefore, there was fraud and suppression of facts on the part of the appellant and therefore extended period of limitation has been rightly invoked by the adjudicating authority.
4. I have considered the rival submissions and perused the records. The credit has been reversed by the appellant on 9.1.2008. In the letter informing the department about reversal of credit, the appellant has furnished the details of credit balance to make it clear that though they availed the credit, the same has not been utilized. Opening balance is shown as Rs.20,86,064.85. After, reversal of Rs.3,86,168/-, the balance is shown as Rs.16,99,896.85. It is not disputed by the department that the credit was reversed before utilization of the same. According to the department, the credit was not reversed alongwith interest. It is also contended that there was suppression of facts and therefore extended period of limitation is invokable. Undisputedly the department has come to know about wrongful availment of credit on 2.1.2008. Frail attempt is made by the respondent to allege suppression of facts against the appellant by stating that the production manager stated a different reason for reversal of credit in his statement dated 22.3.2011, where as in the letter dated 9.1.2008 the appellant had stated that the credit is being reversed because the machines are yet to be installed. It is the case of the department that these statements being contradictory it shows suppression and intention to evade payment of duty. I cannot agree with this view of the authorities below. On pointing out the defect, the appellant reversed the credit. If the appellant was liable to pay interest the department ought to have informed the same to the appellant soon after receiving the letter informing the reversal of credit. After coming to know about wrongful availment of credit on 2.1.2008 the respondent has remained in their bureaucratic slumber for almost four years. Therefore a summons is seen issued to the production manager and a case of suppression is sought to be built up by hanging on to the different words used by the appellant stating that the credit has been reversed. The department has no case that the invoices are bogus. No investigation at the end of supplier of machine was done. There may be many reasons for absence of the machines in the factory. If there was fraud it is for the department to establish the same. In a catena of judgements, the Supreme Court has clarified that when the fact is within the knowledge of the department, the extended period of limitation is not invokable. Again it is pointed out by the learned Counsel for the appellant, that the credit when reversed before utilization of the same would amount to not taking credit. Taking into consideration these facts and circumstances of the case, I do not find that department has been able to establish fraud, or suppression with intention to evade payment of duty so as to invoke extended period. I am of the view that the demand is barred by limitation. As the issue of limitation is answered in favour of the appellant, I do not consider it necessary to enter into the merits of the case.
5. In the result, the impugned order is set aside and the appeal is allowed.
(pronounced in the open court on 07.10.2015) (Sulekha Beevi C.S.) Member (Judicial) mk 5