2019 (3) TMI 515 – CESTAT CHENNAI – TMI – Validity of SCN – Suppression of facts – extended period of limitation – Held that:- The SCN is not ipso facto adjudication; just a proposal which culminates in the adjudication order and during the adjudication proceedings, the adjudicating authority looks into all aspects of law, facts and explanations offered by the assessee, the final order and the demand follows thereafter and hence the arguments of the Ld. Consultant that for proposing entire demand, in the SCN itself is bad, cannot be accepted and hence, the same is rejected.
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One hand, appellant claims that there was no suppression, longer period of limitation should not have been invoked; on the other hand it doesn’t explain difference in closing stock as at the end of the year and the opening stock as of next year. On being pointed out, it admits the duty liability but gives a working as to correct duty liability. Had there not been the show cause notice, the appellant would not
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, 2004 (CCR, 2004) the appellant is required to reverse the Cenvat credit involved on the closing stock of inputs and inputs contained in the finished goods available as on 31.03.2005 and after deducting such amount, credit if any, still remaining, shall lapse. It was alleged by the Revenue that the assessees have not correctly reversed the credit involved in the inputs lying in stock or raw materials in process or finished product as on 01.04.2005 when they opted for availing the benefit of exemption notification. Hence, a Show cause notice dated 09.01.2008 was issued proposing recovery of short payment of duty, interest and penalty under Rule 15(2) of CCR, 2004 read with Section 11 AC of Central Excise Act, 1944. On adjudication, proposals made in the SCN were confirmed and on appeal, the Commissioner (Appeals) rejected the appeal. On further appeal before the Tribunal the matter was remanded to the Commissioner (Appeals) for denovo consideration in the light of specific directions v
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rly, suppression cannot be alleged and the demand is clearly hit by limitation. The Commissioner (Appeals) has not even considered the Board s Master Circular No. 1053/2017-CX dated 10.03.2017, where in it has been clarified that extended period can be invoked only when there are ingredients necessary to justify the demand for the extended period in a case leading to short payment or non-payment of tax. Hence, the onus of establishing these ingredients lies on the Revenue for invoking extended period. Ld. Consultant submitted that Hon ble Supreme Court, Hon ble High Courts and Tribunals have consistently held in the following cases that when assessee is opting for exemption under Notification No. 8/2003, the assessee needs to reverse only the unutilized credit balance on the relevant date and once input credit is taken legally it cannot be denied after the issue of exemption notification. He relied on the following case laws in support of his contentions wherein similar view has been e
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ied on the findings in the impugned order and requested for upholding the same. 4.1 I have heard the rival submissions and have gone through the case laws cited by the Ld. Consultant. The SCN is not ipso facto adjudication; just a proposal which culminates in the adjudication order and during the adjudication proceedings, the adjudicating authority looks into all aspects of law, facts and explanations offered by the assessee, the final order and the demand follows thereafter and hence the arguments of the Ld. Consultant that for proposing entire demand, in the SCN itself is bad, cannot be accepted and hence, the same is rejected. 4.2. I have also gone through the explanation filed by the assessee vide acknowledgement dated 13.03.2008in response to the SCN which is filed along with the appeal memorandum at pages 42-44. In the second page i.e., at running page 43, appellant admits that …….the value for the purpose of calculation if duty should only be on the basic value of
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proposition that there was no suppression or that invoking extended period was wrong. 4.4 Further, in the subsequent paragraph/s appellant also indicates that on account of quality issues some of the material manufactured was rejected by its customer and the same was held back it its stock, with the following explanation: ….therefore, we may have to apply for destruction of this quantity…. If in case we apply for destruction of this material the excise duty involved on the proportionate quantity of raw materials contained therein will be reversed at the time of destruction….. 4.5 Much after this, as noted by the adjudicating authority, appellant did not file any documentary evidence to prove either the destruction as of above, or the reversal as indicated by it in its reply extracted above. Even if it is to be accepted that the reversal would depend on destruction, learned Commissioner (Appeals) in the impugned order observes at paragraph 8 as under:- …. As
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on 31.03.2005 as indicated by the appellant vide its letter dated 01.04.2005 was ₹ 1,03,975/-. On verification of P & L account of the appellant, the closing stock as on 31.03.2005 was ₹ 17,47,361/- as against the actual figure informed to the revenue. I find from their reply that there is no dispute raised as to the above findings of such a serious mismatch between the closing stock and opening stock, but still works out the balance if any, to be paid as indicated in the earlier paragraphs. 5. One hand, appellant claims that there was no suppression, longer period of limitation should not have been invoked; on the other hand it doesn t explain difference in closing stock as at the end of the year and the opening stock as of next year. On being pointed out, it admits the duty liability but gives a working as to correct duty liability. Had there not been the show cause notice, the appellant would not have come forward so gratefully, as there would not have arisen any oc
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