2015 (5) TMI 1076 - AT - Central Excise

Denial of cenvat credit benefit - input services namely, AMC on Computer, Courier charges, photocopy charges, rent-a-cab and AC Hire charges - invocation of the extended period of limitation - Held that - Proceedings initiated by the Central Excise Department for recovery of cenvat credit is barred by limitation of time, inasmuch as, the period involved in the present case is 2009-10, whereas show cause notice, seeking recovery of cenvat credit was issued in August, 2011. For invocation of extended period of limitation, the Department has to prove with tangible evidence that there is element of suppression, misstatement, etc. on the part of the assessee, with intent to evade payment of duty. The ingredients mentioned in the proviso to section 11A of the Central Excise Act, 1944 are absent in the present case for invocation of the extended period of limitation. See Moser Baer India Ltd. vs. CCE, Noida (2015 (1) TMI 1093 - CESTAT NEW DELHI ) while allowing the appeal in favour of the appellant has held that since the credit taken by the appellant are reflected in the statutory records, no suppression of fact or misstatement or malafide intension can be attributed for invoking the longer period of limitation. - Decided in favour of assessee

Summary

Issues: Denial of cenvat credit benefit on input services; Barred by limitation of time; Rent-a-cab service charges; Courier charges exclusion from input service definition.

In the present case, the main issue revolves around the denial of cenvat credit benefit on various input services like AMC on Computer, Courier charges, photocopy charges, rent-a-cab, and AC Hire charges. The appellant argues that these services were used for business-related activities and should be considered as input services as per the definition in Rule 2(l) of the Cenvat Credit Rules, 2004. The appellant also contends that the show cause proceedings initiated by the Department are time-barred. The appellant relies on the judgment of the Hon'ble Karnataka High Court to support their stance.

Regarding the rent-a-cab service charges, the Revenue argues that since the charges for hiring the vehicles were recovered from the employees, the service tax paid on such services would not be available as cenvat credit to the employer. The Revenue also asserts that the courier charges paid by the appellant for clearance of finished products fall under the exclusion clause of the input service definition. The Revenue relies on tribunal decisions to support their arguments.

Upon hearing both sides and examining the records, it is found that the Central Excise Department's proceedings for recovery of cenvat credit are time-barred. The period involved in the case is 2009-10, while the show cause notice seeking recovery was issued in August 2011. The Department failed to prove elements like suppression or misstatement on the part of the assessee to invoke the extended period of limitation as required by the proviso to section 11A of the Central Excise Act, 1944.

In a significant reference to a previous tribunal case, it is noted that since the credit taken by the appellant is reflected in statutory records, there is no evidence of suppression, misstatement, or malicious intent to warrant the longer period of limitation. Consequently, the impugned order is set aside, and the appeal is allowed in favor of the appellant based on the ground of limitation.