ORDER
1. The order of the Commissioner of Central Excise, Vadodara impugned in this appeal confirmed the demand, made in the notice dated 19.6.1995, for reversal of modvat credit alleged to be wrongly taken by the assessee during the period between July, 1990 and June, 1991. The notice alleged that the part of the duty paid on beta-napthol by its manufacturer which represented set-off available under notification 432/86 would not be available as credit.
2. Counsel for the appellant agrees that on merits the issue is settled against the appellant by the decision of the Tribunal in Abhijit Chemicals Vs. CCE 1998 (102) ELT 105. He, however, challenges the Commissioner’s order on the ground of limitation. The notice, he says, alleges suppression of facts without indicating the precise nature of the suppression. The Commissioner’s order, the further says, goes on the footing that the extended period was available because “the assessee had not separated the amount of set off as indicated in the Gate Passes for inputs of Beta Napthol and instead of that, they had taken Modvat Credit for the whole amount.” He contends that the gatepasses did not indicate separately the amount of set off. Nevertheless, they did indicate that the manufacturer of beta-napthol had availed of the notification in question. The remark to this effect was made in the last column of each of the gateposts. There is no dispute that the appellant had submitted these gateposts in the following month when the credit was taken as required by the rule. The department thereafter has become fully aware of the fact that the entire duty mentioned in the gatepasses had been taken as credit and extended period therefore would not be available.
3. The departmental representative says that the appellant had not clearly indicated to the department that it took credit of the “set off” portion of the duty paid on the inputs.
4. Each of the gate
passes issued by the manufacture of beta-napthol on which appellant took credit contains a remark “set off A/c notification 432/86 dated 6/10/86”. It would have been evident from this that the manufacture of the beta-napthol had availed of the “set off”, as it is commonly known, provided in the notification. The department’s case in effect is that the duty paid by the manufacturer included that component which was paid from the credit available to him of the duty paid on the raw material used in its manufacture. This is what the notification provides. The fact that the duty paid on the beta-napthol included this component would be evident from the remark that I have referred to; the fact that the appellant took credit of the entire duty paid on the beta-nepthol would be evident from the entries in the extract of RG-23A register which had been submitted to the department. By putting both these documents together, the department surely could not but find that the appellant had taken credit that it was not entitled to. This is what the notice affirms when it alleges that the fact of credit having been taken was noticed during “verification and scrutiny”. Such scrutiny was obviously of the documents that the appellant had submitted. The notice does not rely upon any other document. Therefore, if the officers could come to know two years after submission of the documents, the fact that the appellant availed credit of the duty in question, they ought to have known this within the period of six months provided in the law for rasing the demand for duty short-levied or non-levied in the ordinary course. The delay in issue of notice was not on account of suppression of facts by the appellant but the failure of the officers to scrutinise the relevant documents in time. The extended period of limitation would therefore not be available to the department.
5. The appeal is accordingly allowed and the impugned order set aside.