Raydean Industries v. Commissioner Cgst, Jaipur .

Dilip Gupta, President:— This application has been filed by the appellant for rectification of mistakes in the final order dated 22.04.2022 of the Tribunal.

2. It has been stated that the submission made on behalf of the appellant at the time of hearing of the appeal and also contained in the written synopsis filed by the appellant that the extended period of limitation contemplated under section 11A (4) of the Central Excise Act, 1944 could not have been invoked in the facts and circumstances of the case was not considered by the Tribunal in the final order. It has also been stated that the learned counsel for the appellant had also made a submission which was pleaded in the Memorandum of Appeal and also in the written synopsis filed by the appellant, in the alternative, that if the appellant was not entitled to exemption under the notification then CENVAT credit of the duty tax paid on inputs, input services and capital goods used in or in relation to the manufacture of final products would be available to the appellant but this submission was also not considered by the Tribunal in the final order.

3. Shri B.L. Narasimhan, assisted by Shri Dhruv Tiwari, learned counsel appeared for the applicant and placed the application as also the Memorandum of Appeal and the written synopsis submitted at the time of hearing of the appeal to support the pleas raised in the application that the inadvertent mistakes should be rectified.

4. Shri Sanjay Kumar Singh, learned authorized representative appearing for the Department has not disputed that the two submissions were advanced during the hearing of appeal but he has submitted that the extended period of limitation was correctly invoked in the facts and circumstances of the case and that the appellant was not entitled to avail CENVAT credits.

5. It is not disputed by the respondents that the aforesaid two submissions were raised by the learned counsel for the appellant during the course of hearing of the appeal. The provisions of section 35C(2) of the Excise Act, which confer power on the Appellate Tribunal to rectify any mistake apparent from the records, would have to be examined and they are reproduced below:—

“35C(2) The Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under subsection (1) and shall make such amendments if the mistake is brought to its notice by the Principal Commissioner of Customs or Commissioner of Customs or the other party to appeal.

Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.”

6. A bare perusal of the aforesaid sub-section (2) of section 35C(2) of the Excise Act indicates that the Appellate Tribunal may, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1). Sub-section (1) provides that the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision for a fresh adjudication. What is, therefore, necessary for a mistake to be rectified is that it must be apparent from the record.

7. The issue, therefore, that arises for consideration is whether non-consideration of the contentions relevant to the issue for determination which were raised before Bench of the Tribunal, can be said to be mistakes apparent from the record so as to be rectified under section 35C(2) of the Excise Act.

8. In Asstt. Commr., Income Tax, Rajkot v. Saurashtra Kutch Stock Exchange Ltd. . (2008) 230 ELT 385 (SC) the Supreme Court held that non-consideration of a decision of a High Court or the Supreme Court can be said to be a “mistake apparent from the record”, which mistake can be rectified. It was pointed out that the error apparent from the record should be so manifest and clear that no Court would permit it to remain on record. It should be pertinent and self-evident and not require any elaborate discussion of evidence or argument. It was also observed that rectification of an order stems from the fundamental principle that justice is above all and it is to be exercised to remove the error and to disturb the finality. Paragraphs 37, 40 and 45 of the judgment are reproduced below:

“37. In our judgment, therefore, a patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the face of the record means an error which strikes on mere looking and does not need longdrawn-out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the possible views, the case cannot be said to be covered by an error apparent on the face of the record.

40. The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a “mistake apparent from the record”? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a “mistake apparent from the record” which could be rectified under Section 254(2).

45. Rectification of an order stems from the fundamental principle that justice is above all. It is exercised to remove the error and to disturb the finality.”

[emphasis supplied]

9. If non-consideration of a decision of the High Court or the Supreme Court can be said to be a ‘mistake apparent from the record’, there can be no doubt that non-consideration of two important submissions which were advanced at the time of hearing of the appeal would constitute a mistake apparent from the record which would require rectification.

10. It will, therefore, be necessary to examine the two contentions that had been raised at the time of hearing of the appeal.

Extended Period of Limitation

11. Section 11A of the Excise Act deals with recovery of duties not levied or not paid or short levied or short paid or erroneously refunded is reproduced below:—

“Section 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,-

(a) the Central Excise Officer shall, within two years from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice;”

12. Thus, a notice can be issued by the central excise officer within two years from the relevant date. However, if the notice is not issued within two years from the relevant date, the central excise officer can still issue a notice within five years from the relevant date provided the conditions set out in sub-section (4) of section 11A of the Excise Act are satisfied. Section 11A (4) is reproduced below:—

“Section 11A(4) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by the reason of-

(a) fraud; or

(b) collusion; or

(c) any wilful mis-statement; or

(d) suppression of facts; or

(e) contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by any person chargeable with the duty, the Central Excise Officer shall, within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under section 11AA and a penalty equivalent to the duty specified in the notice.”

13. The demand raised in the show cause notice dated 03.01.2019 is for the period from December 2013 to June 2017. The normal period of limitation would be from December 2016 up to June 2017 and the demand upto November 2016 would be beyond the normal period of limitation.

14. The provisions of section 11A (4) of the Central Excise Act came up for interpretation before the Supreme Court in Pushpam Pharmaceuticals Company v. Collector Of Central Excise, Bombay . . (1995) 78 ELT 401 (SC). The Supreme Court observed that section 11A(4) empowers the Department to reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. It is in this context that the Supreme Court observed—

“2. ****** The Department invoked extended period of limitation of five years as according to it the duty was shortlevied due to suppression of the fact that if the turnover was clubbed then it exceeded Rupees Five lakhs.

********

4. A perusal of the proviso indicates that it has been used in company of such strong works as fraud, collusion or willful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression.”

(emphasis supplied)

15. This decision of the Supreme Court in Pushpam Pharmaceuticals was followed by the Supreme Court in Anand Nishikawa Co. Ltd. v. Commissioner of Central Excise, Meerut . (2005) 7 SCC 749 and the relevant paragraph is as follows:—

“27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceuticals Company v. Collector Of Central Excise, Bombay . we find that “suppression of facts” can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties, the omission by one to do what he might have done and not that he must have done, would not render it suppression. It is settled law that mere failure to declare does not amount to wilful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made hereinabove that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in the proviso to Section 11-A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was 7 (2005) 7 SCC 749 11 E/52953/2018 not open to CEGAT to come to a conclusion that the appellant was guilty of “suppression of facts.”

(emphasis supplied)

16. In Easland Combines, Coimbatore v. Collector of Central Excise, Coimbatore . (2003) 3 SCC 410 the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation.

17. The aforesaid decisions of the Supreme Court were relied upon by the Supreme Court in Uniworth Textiles Limited v. Commissioner Of Central Excise, Raipur . . (2013) 288 ELT 161 (SC) and the relevant portion of the judgment is reproduced below:

“12. We have heard both sides, Mr. R.P. Batt, learned senior counsel, appearing on behalf of the appellant, and Mr. Mukul Gupta, learned senior counsel appearing on behalf of the Revenue. We are not convinced by the reasoning of the Tribunal. The conclusion that mere non-payment of duties is equivalent to collusion or willful misstatement or suppression of facts is, in our opinion, untenable. If that were to be true, we fail to understand which form of nonpayment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or wilful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso.”

(emphasis supplied)

18. The Supreme Court in Continental Foundation Joint Venture v. Commissioner of Central Excise, Chandigarh . (2007) 216 ELT 177 (SC) also observed in connection with section 11A(4) of the Excise Act, that suppression means failure to disclose full information with intention to evade payment of duty and the observations are as follows:—

“10. The expression “suppression” has been used in the proviso to Section 11A of the Act accompanied by very strong words as “fraud’ or “collusion” and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a wilful misstatement. The latter implies making of an incorrect statement with knowledge that the statement was not correct.”

(emphasis supplied)

19. It is, therefore, clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty.

20. To ascertain whether the conditions stipulated in sub-section (4) of section 11A of the Excise Act were satisfied and whether the adjudicating authority was justified in holding that it was correctly invoked, it would be necessary to reproduce the relevant portion of the show cause notice containing allegations relating to invocation of the extended period of limitation and they are as follows:—

“2.1. Whereas, on preliminary scrutiny of ER-3/ER-1 Returns filed by the assessee for the period from January, 2014 to June, 2017 (RUD-3) on the Departmental software application named Automation of Central Excise and Service Tax (ACES), it was observed that they had shown clearances of ‘module mounting structure’ used for Solar Power Generating System falling under Heading No. 7308 of the CETA, 1985 availing exemption in terms of Notification No. 12/2012-CE dated 17.03.2012 (Sl. No. 332).

4.3. It appears from ER-3/ER-1 filed and invoices issued by the assessee that they have not captively used/consumed the ‘module mounting structures’ but have rather cleared the same to various buyers situated outside the factory of production. It is pertinent to mention here that the assessee did not have the facility for manufacturing of any of goods specified at S. No. 1 to 20 of the List 8 of Notification No 12/20122-CE dated 17.03.2012. Therefore, it appears that the assessee was not fulfilling the basic requirement for being eligible for availment of benefit of Nil rate of duty provided under Notification No. 12/2012-CE dated 17.03.2012 vide Sl. No. 332 in the Table mentioned therein during the period from 01.04.2013 to 10.07.2014.

14. xxxxxxxxx Further, the assessee also violated the provisions of Rule 6 of the Central Excise Rules, 2002, in as much as they removed the goods without proper and correct-self-assessment and violated the provisions of Rule 4 and 8 of the Central Excise Rules, 2002 in as much as they cleared the goods without payment of duty, without establishing their entitlement for exemption in terms of Notification No. : 12/2012-CE dated 17.03.2012 as amended vide Notification No. : 12/2014-CE dated 11.07.2014 (Sl. No. 332/332A of the table). Thus the assessee had deliberately cleared the goods at ‘nil’ rate of duty under Notification No. : 12/2012-CE dated 17.03.2012, as amended, with intent to evade payment of Central Excise duty though there was no ground for confusion on eligibility aspect of the said Notification. xxxxxxx”

21. In reply to the show cause notice, the appellant clearly stated that the appellant was under a bonafide belief that it was entitled to seek exemption under the notification dated 17.03.2012, as according to the appellant ‘module mounting structures’, which were supplied to suppliers of solar power water heater systems for irrigating agricultural fields would be exempted from payments of Central Excise duty in terms of the said notification. The appellant also pointed out that it was regularly filing ER-III/ER-I returns wherein it had declared the following facts regarding distribution of goods, exemption notification number with serial numbers and duty payable. The said chart, which is a part of the reply to the show cause notice, is reproduced below:—

Month/Quarter CETH Description of goods Tariff Notification Sr. No. in Tariff Notification Duty Payable January-March, 14 73089090 Solar Structure 12/2012-CE 332 0 April-June, 14 73089090 Solar Structure 12/2012-CE 332 0 July-September, 14 73089090 Structures (Excluding prefabricated buildings of Heading 9406 and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frame work, doors and windows and their frames and thresholds for Doo 12/2012-CE 332 0 October-December, 14 73089090 Structures (Excluding prefabricated buildings of Heading 9406 and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frame work, doors and windows and their frames and thresholds for Doo 12/2012-CE 332 0 January-March, 15 73084000 Structures (Excluding prefabricated buildings of Heading 9406 and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frame work, doors and windows and their frames and thresholds for Doo 12/2012-CE 332 0 April-June, 15 73084000 Structures (Excluding prefabricated buildings of Heading 9406 and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frame work, doors and windows and their frames and thresholds for Doo 12/2012-CE 332 0 July-September, 15 73084000 Structures (Excluding prefabricated buildings of Heading 9406 and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frame work, doors and windows and their frames and thresholds for Doo 12/2012-CE 332 0 October-December, 15 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 January-March, 16 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 April, 16 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 May, 16 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 June, 16 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 July, 16 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 August, 16 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 September, 16 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 October, 16 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 November, 16 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 December, 16 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 January, 17 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 February, 17 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 March, 17 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 April, 17 73089040 Solar Mounting structures used for Solar Power Generating System 26/2012-CE 332 0 May, 17 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0 June, 17 73089040 Solar Mounting structures used for Solar Power Generating System 12/2012-CE 332 0

22. It is for this reason that the appellant contended in the reply that the Department was aware that appellant, which was manufacturing module mounting structure used for solar power generating system, had availed exemption under notification dated 17.03.2012 at S. No. 332 and cleared the goods at NIL rate of duty and so there was no suppression. The appellant also pointed out that suppression has to be with an intent to evade payment of duty.

23. The Commissioner, in the impugned order dated 15.07.2019, examined the issue of limitation in the following manner:

“5.11.4 On scrutiny of the relevant ER-1 Returns, I observe that the assessee had not been mentioning the exact description of the goods cleared as ‘Module Mounting structures’ and was only giving a generic description due to which it was not possible for the Department to ascertain the exact nature of the goods cleared and also regarding eligibility of the subject goods to the exemption claimed. Had the investigation not been carried out by the jurisdictional Range Officer, it would not have been possible for the department to find out the actual nature of goods cleared, their Ineligibility to the exemption claimed and consequently, the said evasion/short payment would have gone undetected. I further find that, it is a case of improper assessment, and wrong availment of exemption notification amounting to deliberate suppression of vital information with a willful intention to evade payment of excise duty. I find that the charge of suppression of material facts with intention to evade duty has been conclusively established herein above. Had the department not conducted the investigation, the actual taxable value would have escaped assessment resulting in evasion and loss to the Government revenue.”

(emphasis supplied)

24. It would be seen that the ER-III/ER-I returns filed by the applicant clearly show that the applicant had categorically declared that it had cleared the final products by availing the exemption under the notification dated 17.03.2012. The applicant had furnished the returns on the basis of self assessment. Even in a case of self-assessment, the Department can always call upon an assessee and seek information. It is under sub-rule (1) of rule 6 of the Central Excise Rules, 2002 . the 2002 Rules that the assessee is expected to self assess the duty and sub-rule (3) of rule 12 of the 2002 Rules provides that the proper officer may, on the basis of information contained in the return filed by the assessee under sub-rule (1), and after such further enquiry as he may consider necessary, scrutinize the correctness of the duty assessed by the assessee. Sub-rule (4) of rule 12 also provides that every assessee shall make available to the proper officer all the documents and records for verification as and when required by such officer. Hence, it was the duty of the proper officer to have scrutinized the correctness of the duty assessed by the assessee and if necessary call for such records and documents from the assessee, but that was not done. It is, therefore, not possible to accept the contention of the learned authorized representative appearing for the Department that the appellant should have filed a proper assessment return under rule 6 of the Rules.

25. Departmental instructions to officers also emphasise upon the duty of officers to scrutinize the returns. The instructions issued by the Central Board of Excise & Customs on December 24, 2008 deal with “duties, functions and responsibilities of Range Officers and Sector Officers”. It has a table enumerating the duties, functions and responsibilities and the relevant portion of the table is reproduced below:”

“LIST OF DUTIES, FUNCTIONS AND RESPO NSIBILITES OF RANGE OFFICER

AND SECTOR OFFICER

SCRUTINY OF RETURNS

S. No. Subject Sector officer's duties Range officer's duties 2.1 Scrutiny of ER-1/ER-2/ER-3 Returns To ensure that these returns are entered in database. To carry out preliminary scrutiny of ER-1/ER-2/ER-3 Returns within a fortnight of receipt & submit the same to the Range officer along with his observations. The preliminary scrutiny is to be carried out on the basis of guidelines/instructions contained in Return Scrutiny Manual To ensure date entry of returns and preliminary scrutiny of returns by the SO as per the guidelines/instructions contained in the Return Scrutiny Manual. He should also take necessary action for recommendation of units for detailed scrutiny and to carry out detailed scrutiny as per guidelines/instructions contained in Return Scrutiny Manual. 2.2 Cases of default in duty payment discovered through ER-1/ER-2/ER-3 Returns. To enter the details of default in the register and submit report to the Range Officer. To verify the default cases, as reported by the Sector Officer, and initiate recovery proceedings. He wil also furnish the report of defaulters to AC/DC. Further, in case of default for more than 30 days, the RO has to enforce the provisions contained in sub-rule 3(A) to Rule 8 of CER, 2002. 2.3 Completion of scrutiny of returns. Each Return, selected for detailed scrutiny, to be endorsed that the same has been subjected to scrutiny and found in order. Shortcomings, if any, be specified alongwith action initiated. To record the fact of completion of scrutiny on all copies of the return and also details of action initiated for shortcomings noticed.

26. The Central Excise Manual published by CBEC on May 17, 2005, which is available on the website of CBEC, devotes Part VI to SCRUTINY OF ASSESSMENT. Paragraphs 2.2, 2.3 and 2.4 of this Part are reproduced below:

“2.2 The Superintendent of Central Excise in-charge of the Range Office, with assistance of the Inspectors in-charge of the factory of an assessee, will scrutinize all the returns. They shall in selected cases, call all connecting documents including invoices and the records and scrutinize the correctness of assessment.

2.3. The Deputy/Assistant Commissioner of Central Excise will scrutinize the returns of the units, which pay duty exceeding rupees one crore but less than Rs. 5 crores from PLA per annum every six months. They shall requisition all connected documents including invoices and the records and scruntinse the correctness of assessment.

2.4 The Additional/Joint Commissioner of Central Excise will scrutinize the returns of the units which pay duty of Rs. 5 crores or more from PLA per annum every six months. They shall requisition all connected documents including invoices and the records and scrutinize the correctness of assessment.”

(emphasis supplied)

27. It is thus evident that not only do the 2002 Rules mandate officers to scrutinise the Returns to verify the correctness of self assessment and empower the officers to call for documents and records for the purpose, Instructions issued by the department also specifically require officers at various levels to do so.

28. Thus, the finding in the order of the Commissioner that the applicant had deliberately filed incorrect returns as a result of which the extended period of limitation could be invoked cannot be sustained. The Department was aware of the material facts, more particularly when the availment of exemption benefit under notification dated 17.03.2012, had been categorically declared by the applicant in the excise returns.

29. Learned counsel for the applicant also submitted that the fact of availment of exemption benefit by the applicant was in the knowledge of the Department even in December 2015 when the Department made a request to the applicant for clarification regarding such exemption. The Department, however, repeatedly asked for details of invoices through various letters for different periods. A summary of the communication exchanged between the Department and the applicant is reproduced below:—

S. No. Date Letters issued by Department/App licant Particulars of letters 1. 31.12.2015 Department Clarification sought from Applicant regarding the exemption availed by the latter. 2. 05.01.2016 Applicant Clarification regarding the exemption availed, was submitted. 3. 29.01.2016 Department Invoices of final products cleared by Applicant during the period January 2014 to December 2015, were requested for. 4. 10.02.2016 Applicant Copies of invoices submitted. 5. 16.02.2016 & 03.03.2016 Department Invoices of final products cleared by Applicant during the FY 2013-2014 (Sl. No. 1 to 50), were requested for. 6. 14.03.2016 Applicant Copies of invoices submitted. 7. 25.07.2017 Department After a gap of more than a year, invoices of final products cleared by Applicant during the period January 2016 to June 2017 were requested for. 8. 18.08.2017 Applicant Copies of invoices submitted.

30. It would also, therefore, be clear that material facts were in the knowledge of Department but still the Department issued show cause notice after inordinate delay of three years.

31. Thus, for all the reasons stated above, the invocation of extended period of limitation for confirmation of the duty cannot be sustained and is set aside.

32. The penalty imposed for this period cannot, therefore, also be sustained.

APPLICANT IS ENTITLED TO AVAIL CENVAT CREDIT

33. The contention of learned counsel for the applicant is that the applicant would be entitled to avail CENVAT credit of duty paid on the inputs, input services and capital goods used in the manufacture of final products, amounting to Rs. 2,09,66,878/- in terms of the provisions of the CENVAT Credit Rules, 2004 . 2004 Credit Rules

34. This submission of learned counsel for the applicant deserves to be accepted as it is a settled position of the law that if duty is held payable on the final product, then the assessee is entitled to credit paid on inputs, input services and capital goods. In this connection, reference can be made to the decision of the Supreme Court in Siddhartha Tubes Ltd. v. Commissioner of Central Excise, Indore (M.P.) . (2006) 193 ELT 3 (S.C.).

35. Thus, paragraph 23 of the final order dated 22.04.2022 passed by the Tribunal shall stand deleted and shall be replaced by the following paragraph:—

“The impugned order dated 15.07.2019 passed by the Principal Commissioner is modified to the extent that the duty demand confirmed for the extended period of limitation i.e. for the period upto November, 2016 and the imposition of penalty are set aside. The appellant would also entitled to avail CENVAT credit of duty paid on the inputs, input services and capital goods in the manufacture of final products. The remaining part of the demand confirmed by the Principal Commissioner in the order dated 15.07.2019 is confirmed. The appeal is, accordingly, allowed to the extent indicated above. The matter is remitted to the Principal Commissioner to re-determine the duty demand in the light of the observations made above.”