Invocation of the extended period for demand is unsustainable when the Department relies on returns (ER-1 and ER-6) filed by the assessee, as such filings preclude the allegation of suppression of facts with intent to evade duty.

R. MURALIDHAR :

The Appellant is manufacturer of sponge iron. In the course of their manufacturing activity they procure two types of coal. In one case wherein the quality is higher, they take Cenvat credit. In respect of slightly inferior quality of coal, they do not take any Cenvat credit. Both such types of coal are used by the Appellant only in their manufacturing process. However, in some cases they also sell non-Cenvat availed coal to the third parties. On the ground that the Appellant has cleared the Cenvat availed coal to third parties during the period November 2011 to February, 2015, a Show Cause Notice was issued demanding Excise Duty of Rs.19,07,235/- The Show Cause Notice was issued on 28.10.2016 by invoking the extended period provisions. After due process, the Adjudicating authority confirmed the demand which came to be affirmed by the Commissioner (Appeals). Being aggrieved, the Appellant is before the Tribunal.

2. The Ld.C.A. appearing on behalf of the Appellant submits that the Appellants are receiving high quality coal on which they have availed Cenvat credit. For slightly lower quality of coal no Excise Duty the same is paid @ 1% or 2% by the manufacturer on which no Cenvat Credit is taken by the Appellant. Both these coal lots are separately stored in the factory premises. However, one single register is maintained for accounting for the receipt and usage of the coal. He submits that the Appellant has regularly filed the monthly ER-6 Return meant for showing the details of principal inputs. They were regularly showing the opening balance, receipt, removal of such coal as such for home consumption and closing balance. They have also been filing the ER-1 Return clearly showing that no Excise Duty has been paid/Cenvat has been reversed when the coal has been removed for third party sale. Therefore, he submits that all the data with regard to the opening balance, clearance etc. are very much available with the Department on monthly basis. Hence, the Department cannot allege suppression on the part of the Appellant by issuing the Show Cause Notice by invoking the extended period provisions. He further submits that the Department has not brought in any evidence to the effect that the Appellant has removed their Cenvat availed coal only for such clearances. No corroborative evidence has been brought in by the Revenue by making any enquiry from the receiver of such coal. Therefore, he submits that the confirmed demand is not sustainable both on merits as well as on account of time bar.

3. The Ld.AR for the Revenue submits that the Appellant has not maintained separate accounts for the coal on which Cenvat is availed and coal on which no Cenvat is availed. The Appellant has cleared the coal to third parties without reversing any Cenvat credit. Therefore, he justifies the confirmed demand.

4. Heard both sides and perused the appeal papers.

5. I find that both sides agree that the Appellant has procured coal from two sources. In respect of one source, the Appellant has procured high quality coal. The Appellant has availed Cenvat credit in this case. As per the Ld.C.A. for the Appellant, along with the high quality coal, the appellants used small portion [to the extent of 20-30%] of lower quality coal. I find that the Show Cause Notice has been issued purely based on the ER-6 Returns for the period November 2011 to February 2015. No investigation has been taken up to find out the details shown in the