show cause as to why a sum of Rs.22,53,110/- (Rupees Twenty Two Lakhs Fifty Three Thousand and One Hundred and Ten only) shall not be recovered for wrongly/irregularly availing/utilizing the Cenvat credit along with interest and penalty.= As for the availment of extended period of limitation under Section 11A of the Act, the Supreme Court in M/s. Continental Foundation Jt. Venture (2 supra) held that the word suppression used in Section 11-A of the Act has to be construed strictly and mere omission to give correct information does not constitute suppression of facts unless it was deliberate with a view to avoid payment of duty. A perusal of the show cause notice shows that there is no allegation of either wilful suppression or fraud or collusion against the respondent. The Commissioner (Appeals) in his order dt.23.09.2014 stated that the appellants therein are filing monthly ER1 returns by which keeping the department well informed about the transaction of the business with duty particulars along with copies of invoices of Cenvat details as well as its availment and that the Department cannot feign ignorance and allege suppression of facts to raise demand of duty by extending period of limitation. On a careful consideration of the reasons assigned by the Commissioner (Appeals), which were upheld by the Tribunal, we are of the opinion that they are sound, convincing and cogent and therefore the Additional Commissioner has erroneously issued the show cause notice during the extended period of limitation which is not available on the facts of the case.
THE HONOURABLE SRI JUSTICE C.V. NAGARJUNA REDDY AND THE HONOURABLE SRI JUSTICE CHALLA KODANDA RAM
Central Excise Appeal No.135 of 2017
30-10-2017
The Commissioner of Central Excise and Service Tax Tirupati Appellant
Shree Radha Krishna Alloys Pvt. Ltd. Respondent
Counsel for the appellant: Sri Suresh Kumar Routhu,
Standing Counsel for the Customs,
Central Excise and Service Tax
Counsel for the respondent :
<GIST :
>HEAD NOTE :
?CITATIONS: 1. 2016 (332) ELT 356 (Tril. Del.)
2. 2007 (216) ELT 177 (SC)
THE HONBLE SRI JUSTICE C.V. NAGARJUNA REDDY
AND
THE HONBLE SRI JUSTICE CHALLA KODANDA RAM
C.E.A. No.135 of 2017
DATED:30-10-2017
THE COURT MADE THE FOLLOWING:
JUDGMENT: (per the Honble Sri Justice C.V. Nagarjuna Reddy)
This central excise appeal arises out of final order
dt.31.10.2016 in Appeal No.E/23733/2014, on the file of the
Customs, Excise and Service Tax Appellate Tribunal, Regional
Bench, Hyderabad (for short, the Tribunal).
2. The respondent has availed Cenvat credit in respect of
MS Plates, HR sheets etc., used for fabrication of capital goods,
namely, reheating, furnace, conveyor No.1, transfer table and
parts of crane gantry, cooling bed etc., installed in the factory.
The Additional Commissioner of the Central Excise, Customs
and Service Tax, Tirupati, issued a show cause notice
dt.7.5.2013 calling upon the respondent to show cause as to
why a sum of Rs.22,53,110/- (Rupees Twenty Two Lakhs Fifty
Three Thousand and One Hundred and Ten only) shall not be
recovered for wrongly/irregularly availing/utilizing the Cenvat
credit along with interest and penalty. The respondent has
submitted its explanation. By order dt.25.03.2014, the
Additional Commissioner has disallowed the Cenvat credit of
the aforementioned amount and also imposed interest, and
penalty of a sum equivalent to the disallowed Cenvat credit.
Feeling aggrieved by the said order, the respondent filed an
appeal before the Commissioner of Customs, Central Excise &
Service Tax (Appeals), Guntur. By order dt.23.09.2014 the
Commissioner (Appeals) has allowed the appeal. The appeal
filed by the appellant before the Tribunal having been
dismissed, the present appeal is filed by the Department.
3. A perusal of the order of the Commissioner (Appeals)
shows that the order of the Additional Commissioner was
reversed on two grounds, namely, that the subject items in
fabrication of identifiable capital goods are used while setting
up of factory and not for any construction activity. While
arriving at the said conclusion, the Commissioner (Appeals)
relied upon the report of the Range Officer. He has rendered a
categorical finding that the respondent has used the subject
items in the fabrication of capital goods and therefore those
goods are eligible for credit. Another reason for setting aside
the order of the Additional Commissioner assigned by the
Commissioner (Appeals) was that the former has exercised his
jurisdiction during the extended period of limitation under
Section 11A of the Central Excise Act, 1944 (for short, the
Act) and that mere suppression of facts without fraud or
collusion or wilful misstatement should not make a case fall
under the said provision. The Tribunal, on reconsideration of
the case endorsed the view taken by the Commissioner
(Appeals). In support of its conclusion, the Tribunal has relied
upon the judgment in Ultra Tech Cement Ltd. v. CCE, Raipur ,
which in turn has referred to the judgment of the Supreme
Court in Continental Foundation Jt. Venture v. Commissioner of Central
Excise, Chandigarh-1 .
4. While exercising jurisdiction under Section 35G of the
Act, this Court would not re-appreciate the facts in issue. Both
the lower fora have concurrently found that the items were used
in fabrication of capital goods which are eligible for Cenvat
Credit. Therefore, finding on this aspect does not give rise to
any substantial question of law.
5. As for the availment of extended period of limitation
under Section 11A of the Act, the Supreme Court in M/s.
Continental Foundation Jt. Venture (2 supra) held that the word
suppression used in Section 11-A of the Act has to be
construed strictly and mere omission to give correct
information does not constitute suppression of facts unless it
was deliberate with a view to avoid payment of duty. A perusal
of the show cause notice shows that there is no allegation of
either wilful suppression or fraud or collusion against the
respondent. The Commissioner (Appeals) in his order
dt.23.09.2014 stated that the appellants therein are filing
monthly ER1 returns by which keeping the department well
informed about the transaction of the business with duty
particulars along with copies of invoices of Cenvat details as
well as its availment and that the Department cannot feign
ignorance and allege suppression of facts to raise demand of
duty by extending period of limitation. On a careful
consideration of the reasons assigned by the Commissioner
(Appeals), which were upheld by the Tribunal, we are of the
opinion that they are sound, convincing and cogent and
therefore the Additional Commissioner has erroneously issued
the show cause notice during the extended period of limitation
which is not available on the facts of the case.
For the aforementioned reasons, we do not find any merit
in this appeal and the same is accordingly dismissed.
__________________________
C.V. NAGARJUNA REDDY, J
__________________________
CHALLA KODANDA RAM, J
30-10-2017
Central Excise Appeal No.135 of 2017
30-10-2017
The Commissioner of Central Excise and Service Tax Tirupati Appellant
Shree Radha Krishna Alloys Pvt. Ltd. Respondent
Counsel for the appellant: Sri Suresh Kumar Routhu,
Standing Counsel for the Customs,
Central Excise and Service Tax
Counsel for the respondent :
<GIST :
>HEAD NOTE :
?CITATIONS: 1. 2016 (332) ELT 356 (Tril. Del.)
2. 2007 (216) ELT 177 (SC)
THE HONBLE SRI JUSTICE C.V. NAGARJUNA REDDY
AND
THE HONBLE SRI JUSTICE CHALLA KODANDA RAM
C.E.A. No.135 of 2017
DATED:30-10-2017
THE COURT MADE THE FOLLOWING:
JUDGMENT: (per the Honble Sri Justice C.V. Nagarjuna Reddy)
This central excise appeal arises out of final order
dt.31.10.2016 in Appeal No.E/23733/2014, on the file of the
Customs, Excise and Service Tax Appellate Tribunal, Regional
Bench, Hyderabad (for short, the Tribunal).
2. The respondent has availed Cenvat credit in respect of
MS Plates, HR sheets etc., used for fabrication of capital goods,
namely, reheating, furnace, conveyor No.1, transfer table and
parts of crane gantry, cooling bed etc., installed in the factory.
The Additional Commissioner of the Central Excise, Customs
and Service Tax, Tirupati, issued a show cause notice
dt.7.5.2013 calling upon the respondent to show cause as to
why a sum of Rs.22,53,110/- (Rupees Twenty Two Lakhs Fifty
Three Thousand and One Hundred and Ten only) shall not be
recovered for wrongly/irregularly availing/utilizing the Cenvat
credit along with interest and penalty. The respondent has
submitted its explanation. By order dt.25.03.2014, the
Additional Commissioner has disallowed the Cenvat credit of
the aforementioned amount and also imposed interest, and
penalty of a sum equivalent to the disallowed Cenvat credit.
Feeling aggrieved by the said order, the respondent filed an
appeal before the Commissioner of Customs, Central Excise &
Service Tax (Appeals), Guntur. By order dt.23.09.2014 the
Commissioner (Appeals) has allowed the appeal. The appeal
filed by the appellant before the Tribunal having been
dismissed, the present appeal is filed by the Department.
3. A perusal of the order of the Commissioner (Appeals)
shows that the order of the Additional Commissioner was
reversed on two grounds, namely, that the subject items in
fabrication of identifiable capital goods are used while setting
up of factory and not for any construction activity. While
arriving at the said conclusion, the Commissioner (Appeals)
relied upon the report of the Range Officer. He has rendered a
categorical finding that the respondent has used the subject
items in the fabrication of capital goods and therefore those
goods are eligible for credit. Another reason for setting aside
the order of the Additional Commissioner assigned by the
Commissioner (Appeals) was that the former has exercised his
jurisdiction during the extended period of limitation under
Section 11A of the Central Excise Act, 1944 (for short, the
Act) and that mere suppression of facts without fraud or
collusion or wilful misstatement should not make a case fall
under the said provision. The Tribunal, on reconsideration of
the case endorsed the view taken by the Commissioner
(Appeals). In support of its conclusion, the Tribunal has relied
upon the judgment in Ultra Tech Cement Ltd. v. CCE, Raipur ,
which in turn has referred to the judgment of the Supreme
Court in Continental Foundation Jt. Venture v. Commissioner of Central
Excise, Chandigarh-1 .
4. While exercising jurisdiction under Section 35G of the
Act, this Court would not re-appreciate the facts in issue. Both
the lower fora have concurrently found that the items were used
in fabrication of capital goods which are eligible for Cenvat
Credit. Therefore, finding on this aspect does not give rise to
any substantial question of law.
5. As for the availment of extended period of limitation
under Section 11A of the Act, the Supreme Court in M/s.
Continental Foundation Jt. Venture (2 supra) held that the word
suppression used in Section 11-A of the Act has to be
construed strictly and mere omission to give correct
information does not constitute suppression of facts unless it
was deliberate with a view to avoid payment of duty. A perusal
of the show cause notice shows that there is no allegation of
either wilful suppression or fraud or collusion against the
respondent. The Commissioner (Appeals) in his order
dt.23.09.2014 stated that the appellants therein are filing
monthly ER1 returns by which keeping the department well
informed about the transaction of the business with duty
particulars along with copies of invoices of Cenvat details as
well as its availment and that the Department cannot feign
ignorance and allege suppression of facts to raise demand of
duty by extending period of limitation. On a careful
consideration of the reasons assigned by the Commissioner
(Appeals), which were upheld by the Tribunal, we are of the
opinion that they are sound, convincing and cogent and
therefore the Additional Commissioner has erroneously issued
the show cause notice during the extended period of limitation
which is not available on the facts of the case.
For the aforementioned reasons, we do not find any merit
in this appeal and the same is accordingly dismissed.
__________________________
C.V. NAGARJUNA REDDY, J
__________________________
CHALLA KODANDA RAM, J
30-10-2017
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