Mak Engineering Industries Limited Vs Commissioner of Central Excise (CESTAT Kolkata)
Held that longer period of limitation cannot be invoked on the ground that no specific instance of suppression of facts was proved against the assessee.
Facts-
A common show cause notice dated 04.07.2001 had been issued to both Mak Engineering and its job worker, ASRM. The first appellant i.e. Mak Engineering was required to show cause as to why Modvat Credit totaling to Rs.15,73,482/- should not be disallowed, interest should not be charged and penalty should not be imposed. The show cause notice alleged, inter alia, that the ingots/billets and rounds used by the appellant were not of the type specified by the buyer and on such basis, credit of Rs.12,83,740/- availed in respect of inputs used in manufacturing Elastic Rail Clip (ERC), Modified Loose Jaw (MLJ), Rail Anchor and Suspension Shackle was liable to be disallowed. Further, credit of Rs.2,89,742/- was proposed to be disallowed in respect of Fish Plate Bar and Loose Jaw Bar on the ground that duty had been paid by the manufacturer, M/s Bengal Hammer Industries (Unit II) whereas the commercial invoice for the same had been raised by Unit III or Unit IV of the said manufacturer.
The de-novo adjudication proceedings culminated in the common impugned order dated 21.02.2012 confirming the proposed demands against Mak Engineering and ASRM. Being aggrieved by the said adjudication order, Mak Engineering and ASRM preferred separate appeals before this Tribunal.
Conclusion-
We find that Mak Engineering had taken credit in respect of the inputs on the basis of documents evidencing payment of duty and such documents had been regularly filed with, examined and defaced by the Central Excise authorities. The assessee-appellant had all along openly purchased the inputs in question and such inputs had been used for the manufacture of goods supplied to the railways who had accepted the same after appropriate inspection. In such circumstances, we are unable to persuade ourselves to hold that there were valid grounds for invoking the longer period of limitation. From a careful perusal of the show cause notice it is apparent that the said show cause notice has merely set out the language of Section 11A of the Excise Act without specifying as to which particular fact was suppressed by Mak Engineering. In any view of the matter, we hold that the present case does not involve any suppression of facts on part of the assessee.
FULL TEXT OF THE CESTAT KOLKATA ORDER
1. The present appeals by M/s Mak Engineering Industries Limited (hereinafter “Mak Engineering”) and M/s Alloy Steel Rolling Mills (hereinafter “ASRM”) are directed against a common de-novo adjudication order dated 21.02.2012 passed by the Commissioner of Central Excise, Kolkata-II Commissionerate. Vide the said impugned order, the adjudicating authority disallowed Modvat Credit of Rs.15,73,482/- to Mak Engineering under various provisions of the Central Excise Act, 1944 (hereinafter “Excise Act”) read with the Central Excise Rules, 1944 (hereinafter “Excise Rules”) along with the confirmation of interest and equivalent penalty. As against ASRM, the impugned order, inter alia, fixed the total outstanding Central Excise duty liability at Rs.48,20,700/- and also confirmed interest thereon and equivalent penalty under various provisions of the Excise Act read with the Rules framed thereunder. It is pertinent to mention here that this is the second round of litigation concerning the self-same issues before this Tribunal involving Mak Engineering and ASRM. As common questions of fact and law are involved, the two appeals were heard together and are now being disposed of by this consolidated order.
2. Brief facts of the two cases are as follows :-
i) A common show cause notice dated 04.07.2001 had been issued to both Mak Engineering and its job worker, ASRM. The first appellant i.e. Mak Engineering was required to show cause as to why Modvat Credit totaling to Rs.15,73,482/- should not be disallowed, interest should not be charged and penalty should not be imposed. The show cause notice alleged, inter alia, that the ingots/billets and rounds used by the appellant were not of the type specified by the buyer and on such basis, credit of Rs.12,83,740/- availed in respect of inputs used in manufacturing Elastic Rail Clip (hereinafter “ERC”), Modified Loose Jaw (hereinafter “MLJ”), Rail Anchor and Suspension Shackle was liable to be disallowed. Further, credit of Rs.2,89,742/- was proposed to be disallowed in respect of Fish Plate Bar and Loose Jaw Bar on the ground that duty had been paid by the manufacturer, M/s Bengal Hammer Industries (Unit II) whereas the commercial invoice for the same had been raised by Unit III or Unit IV of the said manufacturer. For purposes of convenience, we set out below the period involved as regards each final product of Mak Engineering with the corresponding allegations in the above show cause notice in the following table –
