M/S. Urja Engineers Limited (S) v. Commissioner Of Central Excise & S.T, Vadodara (S).

Per : Mr. H.K. Thakur; This appeal has been filed by the appellant against OIA No. COMMR-A--204-VDR-II-2006 dated 14.11.2006. The issue involved in the present proceedings is whether extended period is invokable in the present facts and circumstances. Appellant is not agitating the issue on merits.

2. None appeared on behalf of the appellant when the case was called out for hearing. Appellant filed written submissions and argued that their unit was also earlier visited both the Internal Audit Teams as well as CERA but no objection was raised. Appellant relied upon the following case laws in support of their agreement that extended period can not be invoked:- (a) Rajasthan Warehousing Corpn. Vs. CCE Jaipur [2011 (23) STR 385 (Tri. Del.)] (b) CCE Bangalore vs. MTR Foods Limited [2011-TIOL-696-HC-KAR-CX] (c) Harrison Polysacks Pvt. Limited vs. Commissioner of Service Tax Vadodara [2013 (292) ELT 513 (Tri. Ahmd.)] (d) CCE Kolkata vs. ITC Limited [2013 (291) ELT 377 (Tri. Kol.)]

3. Shri Govind Jha (AR) appearing on behalf of the Revenue relied upon the following case laws to argue that extended period is invokable in this case:- (a) CCE Surat vs. Neminath Fabrics Limited [2010 (256) ELT 369 (Guj.)] (b) Nitin Patki vs. CCE Thane [2011 (273) ELT 104 (Tri. Mum.)] (c) UOI vs. Rajasthan Spinning & Weaving Mills [2009 (238) ELT 3 (SC)]

4. Heard both sides and perused the case records. The only point required to be decided in this appeal is whether extended period of limitation under section 11a of the central excise is applicable to the facts and circumstances of this case. Appellants unit was Audited by the audit parties. The quantum of credit taken was duly reflected in the periodical returns filed by the appellant with the department. It is observed from the case law relied upon by the appellant that this bench in the case of Garrison Polysacks Pvt. Limited vs. Commissioner of Service Tax, Vadodara (supra) held as follows in Para 7 & 8 :- 7.?I have considered the submissions made at length by both the sides. The issue involved in this case is regarding interest liability fastened on the appellant for availment of ineligible cenvat credit and also imposition of penalty. I find that there is no dispute that the appellant had availed excess cenvat credit on the invoice raised by an export oriented unit. I also find that the appellant had reversed the cenvat credit on 4-9-2009 when second audit checking of the documents took place and before the issuance of the show cause notice. I also find from the records that the first audit of the appellant took place on 17th to 19th August, 2009 and the audit party did not notice any thing wrong in availment of cenvat credit. On subsequent perusal of records and verification of the documents maintained by the appellants, it was noticed that the appellant availed excess credit of Rs. 1,96,329/-. Show cause notice in this case was issued on 12-1-2010 along with demand for the interest and imposition of penalties. I find strong force in the contentions raised by the ld. Consultant that the judgment of the Honble High Court of Karnataka in the case of MTR Foods Ltd. would be applicable in this case, for the proposition that extended period cannot be invoked when no objections were raised in the first audit by the Revenue officers and in second audit, objections were raised. I respectfully reproduce the ratio of their Lordships which is recorded by them in paragraph-4 of the judgment. 4.?As is clear from the material on record, the returns were filed promptly. In the returns it is clearly mentioned that they availed credit under the aforesaid rules. The audit party accepted the same. It is only in the second audit that they noticed the mistake and initiated proceedings. Therefore, in the light of the aforesaid facts none of the other conditions prescribed in the Proviso exists in this case to extend the period of limitation of 5 years. It is in this background the Tribunal was justified in setting aside the order passed by the appellate authority and in restoring the order passed by the original authority. Therefore, there is no merit in this appeal. Accordingly, it is dismissed. 8.?I also find that the Division Bench of the Tribunal in the case of Rajasthan State Warehousing Corp. (supra) had in an identical situation held that when the demand for the extended period is not invocable, no demand for interest, imposition of penalty be sustained. In the case in hand, the law laid down by the Honble High Court of Karnataka and the Division Bench of the Tribunal would squarely apply as the appellant could not have been saddled with duty. The appellant has himself voluntarily paid the duty before the authority and also reversed the credit on being pointed out. 4.1 As the facts of the present appeal are similar to the facts of the case before this bench in the case of Garrison Polysacks Pvt. Limited case therefore, the ratio of the same will be applicable to the present appeal also. Accordingly, it is held that extended period is not applicable in the present proceedings.

5. Accordingly, appeal filed by the appellant is allowed with consequential relief, if any. (Order pronounced in the Court on 24.10.2014) (H.K. Thakur) Member (Technical) .KL