Decided on January 14,2015

Singla Cables Appellant
Commissioner Of Central Excise, Jammu Respondents


Ashok Jindal, Member (J) - (1.)THE appellant are manufacturers of telephone cables and have unit in the area specified under Notification No. 56/2002 -CE in the State of Jammu & Kashmir. They are availing of the duty exemption under Notification No. 56/2002 -CE. For availing this exemption, the assessee as per the conditions of this notification, are required to utilise the Cenvat credit available at the end of the month, to the extent possible for payment of duty on the finished products cleared during the month and only balance of amount of duty, if any, is required to be paid through PLA and this duty paid through PLA is refunded in terms of this exemption notification by self credit or on making an application to the Jurisdictional Commissioner. In this case, the appellant by using imported inputs in respect of which in addition to Additional Custom Duty, Special Additional Custom Duty (SAD) under Section 3(5) of the Indian Customs Tariff Act, had also been paid. However, the appellant, during the period from February 2006 to March 2006 had confined to Cenvat credit availment only to Additional Customs Duty and had not taken the Cenvat credit of Rs. 10,72,419/ - available in respect of Special Additional Customs Duty (SAD). To the extent the lesser Cenvat credit was availed there was lesser payment of duty through Cenvat credit and higher payment of duty through PLA resulting in higher refund under Notification No. 56/2002 -CE. When this was pointed out by the Department in December 2006, the appellant immediately took the Cenvat credit of Rs. 10,72,419/ - during that month and utilised this credit for payment of duty on their final product cleared during December 2006. The department issued a show cause notice on 06/1/11 demanding allegedly excess refund claim under Notification No. 56/2002 -CE of Rs. 10,72,419/ - alongwith interest and also for imposition of penalty. This show cause notice was issued by invoking extended period under proviso to Section 11A(1). This show cause notice was adjudicated by the Additional Commissioner vide order -in -original dated 23/3/12 by which the above duty demand was confirmed alongwith interest and penalty of equal amount was imposed. On appeal being filed to Commissioner (Appeals), this order of the Additional Commissioner was upheld vide order -in -appeal dated 07/4/13 against which this appeal has been filed.
(2.)HEARD both the sides.
Shri Vikrant Kackaria, Advocate, the learned Counsel for the appellant, pleaded that there is no excess of refund under Notification No. 56/2002 -CE in as much as while during the period from February 2006 to April 2006, the Cenvat credit of Rs. 10,72,419/ - was not taken resulting in higher payment of duty to that extent through PLA and, hence, higher quantum of refund, but in December 2006 as soon as this was pointed out by the audit party, the appellant took the Cenvat credit of this amount i.e. Rs. 10,72,419/ - during that month, as a result of this during that month, they got lesser amount of refund to that extent, that overall there was no excess refund and hence there is no question of recovery, that in any case there is not even intention to claim higher refund and hence proviso to Section 11A(1) is not applicable, that the demand raised vide show cause notice dated 06/1/11 is totally time barred, therefore impugned order be set aside and the appeal be allowed.

(3.)SHRI A.K. Dhawan, the learned DR, opposed the contentions of the learned Counsel by reiterating the findings of the Commissioner (Appeals) in the impugned order. He pleaded that there was suppression of fact and hence extended period has been correctly invoked.

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