This is an appeal filed by the appellants against the Order dated 13.2.12 passed by the Commissioner of Central Excise(Appeals), Mumbai. 2. The facts of the case are that the appellants were availing Cenvat credit on inputs received from 100% EOU. As per provisions of Rule 3(7) of Cenvat Credit Rules, 2004 in respect of inputs received from 100% EOU with effect from 1.3.2006, Cenvat credit is admissible equal to the amount calculated by the formula X x [ 1+BCD/400) x (CVD/100) ]. However, the appellants were availing full Cenvat credit of CVD, Education Cess, Secondary and Higher Education Cess. In view of Rule 3 of the Cenvat Credit Rules, the appellants were entitled to Cenvat credit as per this formula prescribed in Rule 3(7)(a) of Cenvat Credit Rules. But the appellants were wrongly availing the Cenvat credit in excess of amount admissible to them as per the provisions of Rule 3(7) of the Cenvat Credit Rules. Accordingly a show-cause notice was issued to them demanding Cenvat credit of Rs. 6,95,541/-. The show-cause notice was adjudicated by the original authority who confirmed the demand alongwith interest and imposed equal amount of penalty on the appellants. The amount of Rs. 6,95,541/- was deposited by the appellants which was appropriated by the original authority. The appeal filed by the assessee before the Commissioner(Appeals) was also rejected. Hence this appeal.
3. Ld. Advocate appearing for the appellants submitted that in this case the show-cause notice has been issued to them beyond the period of limitation of one year and the demand is liable to be set aside on the ground of time bar. He also submitted that the data of Cenvat credit availed by them was shown in ER1 Returns for the period May, 2007 to October, 2008. He submitted that Rule 3(7)(a) of Cenvat Credit Rules was amended from 7.9.2009 and it was observed by the Commissioner(Appeals) that credit of Education Cess and Secondary and Higher Education cess was admissible only from the date of amendment i.e. from 7.9.2009. He submitted that there were several decisions of the Tribunal taking the view that Cenvat credit is admissible on Education cess and Secondary and Higher Education Cess on inputs received from 100% EOU for the period prior to the amendment. He relied on the decision in the case of (1) Emcure Pharmaceuticals Ltd. vs. CCE, Pune - 2008-TIOL-226-CESTAT-MUM, (2) Shreya Pets Pvt.Ltd. vs. CCE, Hyderabad - 2009(240)ELT 408; (3) CCE and ST Daman vs. M/s.Cello Plasto Tech - 2011-TIOL-1707-CESTAT-AHM and (4) M/s. Tyche Industries Ltd. Kakinada (AP) vs. CCE, Visakhapatnam - 2010-TIOL-810-CESTAT-Bang. Since the issue was settled by these decisions of CESTAT, there is no reason for invoking the extended period in their case. He also pointed out that though the amendment took place on 7.9.2009, show-cause notice to them was issued only on 30.3.2010 invoking the extended period for demanding the Cenvat credit for the period May, 2007 to October, 2008. He, therefore, submitted that in view of the various CESTAT’s decisions covering the period prior to amendment, they were eligible for Cenvat credit of Education cess and Secondary and Higher Education cess on inputs received from 100% EOU and the case of the department is clearly hit by the bar of limitation.
4. Ld. Dy.Commissioner appearing for the Revenue reiterated the findings of the lower authorities and submitted that since the amendment came into effect on 7.9.09 they were not eligible for the benefit of cenvat credit prior to amendment and accordingly the demand was rightly confirmed by the lower authorities.
5. After hearing both sides, I find that the appellants are mainly contesting the impugned order on the ground of limitation. It is the fact that the show-cause notice in this case was issued on 30.3.2010 demanding the cenvat credit for the period May, 2007 to October, 2008 i.e. beyond the period of one year. The appellants were relying on the decisions in the case of Emcure Pharmaceuticals Ltd., Shreya Pets Pvt.Ltd. and M/s. Tyche Industries Ltd.(supra). All these decisions were issued prior to the issue of show-cause notice. Therefore, the submission of the appellants that in view of the decisions, they were under bona fide belief that Cenvat credit is admissible on Education cess and Secondary and Higher Education cess even for the period prior to the amendment has considerable force. I, therefore, find that the appellants have strong case on the ground of limitation. Without going to the merit of the case, I, therefore, set aside the Order-in-Appeal and allow the appeal.