SRV AUTOMATIONS Vs. COMMISSIONER OF C. EX., MANGALORE

JUDGEMENT

(1.) THIS appeal arises from the Order -in -Appeal No. 250/2005 C.E. dated 27 -10 -2005 confirming the Order -in -Original No. 43/2005, dated 2 -3 -2005 passed by the Assistant Commissioner. The appellants had received Industrial Washing Machines from M/s. TVS Suzuki Ltd. for refurbishing and modification process. M/s. TVS Suzuki Ltd. cleared these items on payment of duty. The appellant took the credit in their Cenvat credit account and paid duty at the time of clearance after modification. The Department felt that these goods were not capital goods for the manufacture of any items by the appellants and hence the credit cannot be taken by them. Therefore a show cause notice dated 28 -7 -2004 was issued pertaining to clearance for the period from 2/2001 to 8/2001. The appellants had paid the amount with interest. They contest the demand on the ground that the show cause notice is barred by time. They had declared all the details with the Department and the payment particulars were known to the Department. There was no suppression of facts, hence the confirmation of demand is not justifiable. They have stated that there was no wilful suppression of facts, misrepresentation and intention to evade payment of duty and hence the larger period is not invokable. Both the authorities had not accepted these pleas. It is the submission of the appellants that the demands are barred by time as they had cleared the goods after refurbishing and modification on payment of duty and all the facts were known to the Department and the Internal Audit party has not raised any objection. Therefore the issue pertaining to the period from 2/2001 to 8/2001 cannot be re -opened when it was settled by issue of show cause notice dated 28 -7 -2004 as there was no suppression of facts. They have also voluntarily paid the amount on the repaired goods. Therefore the value addition at the rate of 9.6% charged by the Department is not sustainable. The learned Consultant relies on the Apex Court judgment rendered in the case of Tamil Nadu Housing Board v. Collector of Central Excise, Madras [1994 (74) E.L.T. 9 (S.C.)]; Collector of Central Excise v. HMM Ltd. [1995 (76) E.L.T. 497 (S.C.)] and Nizam Sugar Ltd. [2006 (197) E.L.T. 465 (S.C.)]. He prays for allowing the appeal with consequential relief.

(2.) THE learned DR reiterates the findings of the Commissioner (Appeals).

(3.) ON a careful consideration of the matter, I notice that the appellants had carried out the activity of refurbishing and modification of the items received by them. They availed Modvat credit and cleared the goods on payment of duty. All the facts were disclosed to the Department. The Internal Audit party had checked the records during 2002 and they did not find any discrepancy. Therefore re -opening the issue after a lapse of three years on the ground that the clearance are to be re -assessed at the higher rate is clearly barred by time. There was no intention to evade payment of duty. The appellants were under bona fide belief, as contended by the Consultant, that they were eligible to avail the Modvat credit. The details had been disclosed to the Department. As there is no suppression of facts, therefore the confirmation of value addition is not sustainable and the same is barred by time. The appeal is allowed on time bar issue only with consequential relief, if any.