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TAXAP/1533/2010 3/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1533 of 2010
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COMMISSIONER,
CENTRAL EXCISE & CUSTOM, VADODARA - II - Appellant(s)
Versus
M/S
HIVOLTRANS ELECTRICALS P. LTD. - Opponent(s)
=========================================================
Appearance
:
MR.VARUN
K.PATEL
for
Appellant
NOTICE SERVED BY DS for
Opponent
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI 24th March 2011
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE AKIL KURESHI)
Revenue
is in Appeal challenging the judgment of the Tribunal dated 7th
August 2009, raising following questions for our consideration :-
[A] Whether, in the facts
and circumstances of the case, the learned CESTAT was right in law in
holding that the demand raised by the Department after a period of
one year from relevant date vide show cause notice dated 12-3-2008 is
barred by the period of limitation as prescribed under Section 11A of
the Central Excise Act, 1944 ?”
[B] Whether sale of welding
electrode to job worker for conducting an independent job work at a
separate place within the factory will be “removal” of
“inputs” for the purpose of Rule 3 (5) of the Cenvat
Credit Rules, 2004 warranting for reversal of Cenvat Credit or not ?”
[C] Whether non-disclosure
of sale of welding electrode on debit notes to job worker for
carrying out job work within the factory while submitting periodical
return viz., ER-1 etc and like information to the Deptt. leads to the
suppression of facts for the purpose of invoking extended period
under Section 11-A of Central Excise Act, 1944 or not ?
It appears that after initial issuance of show cause notice,
the Adjudicating Authority ruled in favour of the respondent and
dropped the proceedings. Issue was carried in Appeal. Commissioner
[Appeals] decided against the respondent, who went to the Tribunal.
The Tribunal reversed the finding of the Commissioner [Appeals] and
allowed the appeal, making following observations :-
“3. I
find that apart from the merits of the case, the demand raised in
March 2008 is by invoking longer period of limitation. It is the
appellant’s contention that they were under a bona fide belief that
when welding electrodes are being used within their factory, though
by the job workers, there is no obligation on their part to reverse
the credit. It stands submitted before me that ownership of the
welding electrodes was not the criteria for availing the credit.
Their being no evidence to reflect upon any malafide or suppression
on the part of the assessee, denial of credit was not justified by
invoking the longer period of limitation.
4. Apart
from the fact that no evidence as regards any suppression of
mis-statement on the part of the appellant stand discussed by the
Commissioner [Appeals], I find that the Assistant Commissioner had
dropped the demand on merits. This fact by itself leads to one
conclusion that the issue is capable of two different
interpretations. If the Adjudicating Officer could interpret the same
in the favour of the assessee, the appellant’s submission that they
were under a bona fide belief that they were entitled to credit,
cannot be rejected. In as much as admittedly the demand stands raised
after a period of one year from the relevant date, I hold that the
same is barred by limitation. The impugned order is accordingly set
aside and appeal allowed with consequential relief to the appellant.”
We
are broadly in agreement with the view of the Tribunal. When the
Tribunal has come to the conclusion that the respondent was under a
bona fide belief that they were entitled to credit and there
being no evidence to reflect upon any mala fides or
suppression on the part of the respondent-assessee, larger period of
limitation was not available to the Department. If the duty demand is
limited to maximum of one year preceding the date of show cause
notice, the amount involved would be negligible. Under the
circumstances, this Tax Appeal is not entertained. Hence, dismissed.
{Akil
Kureshi, J.}
{Ms.
Sonia Gokani, J.}
Prakash*
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