ORDER
M.P. Bohra, Member (J)
1. Heard Shri B.N. Chattopadhyay, Ld. Consultant for the appellants and Shri J.R. Madhiam, Ld. JDR for the respondents.
2. Shri Chattopadhyay submits that the only ground for which the credit has been disallowed is a letter dated 25th February, 2002 from the appellants. The law was not clear to them initially. Hence, they agreed with the Central Excise authorities not to take the credit or to reverse the credit from RG 23A Part II. But for this, they wrote a letter to the Superintendent of Central Excise, Range I for confirmation whether they should withdraw the credit or not. The said confirmation did never come from the Superintendent and they did not reverse the credit. He submits that the deposit made cannot be treated to be a payment of duty. He relies on the following decisions:
(1) CCEx., Meerut v. Monnet Industries Ltd., 2003 (56) RLT 247 (CEGAT, Delhi)
(2) Prempreet Textile Industries Ltd. v. CCE, Surat, 2003 (158) ELT 767
He, therefore, submits that even if the amounts were deposited in course of investigation, the same, if admissible, under the law, the benefit is required to be extended to the appellants. He further submits that the demand has been raised on 26.9.2002 for the period from 1.5.2000 to 30.4.2001. The demand being issued beyond a period of one year, so the demand is time barred. This has also been confirmed by the Commissioner in the impugned order. Therefore, he submits that the demand is time barred and the demand of duty cannot be confirmed. He, therefore, submits the appeal may kindly be allowed.
3. In reply, Shri Madhiam, supports the order of the Commissioner (Appeals) of Central Excise, Haldia.
4. In the present case, the Commissioner, Haldia Commissionerate, has admitted in his order at internal pages 8 & 9 to hold as under:
“I find that the present show-cause notice has been issued on 26.9.2002 covering the period from 1.5.2000 to 30.4.2001 i.e. after the expiry of 1 year from the relevant dates. I fully agree with the submissions of the assessees that the show-cause notice is barred by limitation of time being issued after expiry of the normal time limit. In terms of proviso to Section 11A(1) of the Act, where any duty of excise has not been levied or paid or has been short levied or short paid show cause notice demanding the duty which has not been levied or paid or which has been short paid should be issued within 1 year from the relevant date. In the present case, I find that the show-cause has been issued beyond the normal time limit of 1 year by invoking extended clause under Section 11A(1) by way of allegation that there was suppression of material facts or wilful mis-statement on the part of the assessee. On examination of the facts of the case and sequence of events I find that the assessee submitted necessary papers and documents and disclosed all facts before the jurisdictional Central Excise Officers of the factory and receipt of different input materials and capital goods of cement unit at Sankrail was within the knowledge/notice of such officers. The sequence of events clearly show that there was no suppression or wilful mis-statement on the part of the assessee for availing Cenvat credit on any input material in any unauthorized manner. I agree with the submissions that the invocation of proviso clause of Section 11A(1) was totally irrelevant in the present case and, therefore it has to be held that the show-cause notice is not sustainable because of limitation of time bar.”
So, it is clear that the demand raised by the show-cause notice is barred by limitation. Similarly, the Commissioner has also come to the conclusions that the appellants are entitled for Cenvat credit on the capital goods. Commissioner has observed in his order at internal pages 13 and 14 which is reproduced below:
“Going by decision of the above case laws and use of different item of iron and steel as input materials by the assessee in the construction of different components of the plant and machinery of the factory it has to be held that such input materials were utilized in the manufacture, construction and set up of different capital goods eligible for Cenvat credit.”
He has denied the credit amounting to Rs. 95,554 on the basis that the appellant has reversed the credit voluntarily. It is clear from the above findings of the Commissioner that the modvat credit availed of by the appellants was in consonance with the Rules and law. So far as the reversal of modvat credit of Rs. 95,554 is concerned, a request was made to the Superintendent of Central Excise, Range V Division, Howrah by their letter dated 25th February, 2002 but no communication was ever sent by the Superintendent to the appellants. The finding of the Commissioner, that the modvat credit amounting to Rs 95,554 were voluntarily reversed by the appellants, is contrary to the facts. Furthermore, a time bar demand of the duty cannot be confirmed by the Commissioner and the benefit of Cenvat cannot be denied on this basis. Therefore, the appeal deserves to be allowed.
5. Consequently, I allow the appeal with consequential relief to the appellants.