2011 (10) TMI 150 - AT - Service Tax

Challenge to demand confirmed by Commissioner (appeals) - The submission of the assessee was that part of the amount was paid as the audit pointed out the discrepancy and in respect of the rest of the demand the audit has not pointed out and therefore for that part of the demand the extended time limit cannot be invoked. - From perusal of the submissions made before the Commissioner (Appeals), it is noted that such submissions have not made before the Commissioner (Appeals). - Matter remanded back to commissioner (appeals).

Summary

Issues:
Denial of credit, demand confirmation, interest imposition, penalty under Section 78 and Rule 15 of CENVAT Credit Rules 2004, appeal before Commissioner (Appeals), time bar contention, liability admission, extended period of limitation, remand for fresh consideration.

Analysis:

The appellate tribunal dealt with a case involving a show-cause notice proposing the denial of credit amounting to Rs. 34,89,736 for the period spanning 2004-05 to 2006-07. The original authority confirmed the demand, adjusted a partial payment made earlier, imposed interest, and penalties under relevant sections. Upon appeal before the Commissioner (Appeals), the appellant contested the inadmissible credit, leading to a partial acceptance of the appeal. The Commissioner (Appeals) upheld a demand of Rs. 2,31,166 and the corresponding penalty while setting aside the demand of Rs. 32,58,570.

The appellant contended that their objection on the time bar applied to the entire demand, not just the contested portion. The tribunal noted the appellant's admission of inadmissible credit worth Rs. 2,31,166. The tribunal considered the argument that the extended period of limitation should not apply to the part of the demand not highlighted during the audit process. The tribunal observed discrepancies in the submissions made before the Commissioner (Appeals) and decided to remand the matter for fresh consideration regarding the invocation of the extended period of limitation, keeping all issues open for review.

The tribunal emphasized the need for the Commissioner (Appeals) to provide a fair hearing to the appellant before reaching a decision. Ultimately, the appeal was allowed for remand, indicating a reconsideration of the time bar issue and the related demand of Rs. 2,31,166.