2011 (9) TMI 506 - HC - Central Excise

Extended Period of Limitation - Held That - Partner avoided appearing before the competent authority - submitted incomplete information when asked for - not registered under maintenance or repair - sufficient grounds for invoking of extended period of limitation. Waiver of Pre Deposit - plea of demand being time barred is raised - Held That - Deposit only 25% of the demand as a precondition of the appeal where no hardship is pleaded before Tribunal or Court is justified.

Summary

Issues:
Central Excise Appeal under Section 35-G against order of Customs, Excise and Service Tax Appellate Tribunal directing deposit of Rs. 11 lacs, consideration of prima facie case, time-barred demand, cooperation of the appellant, extended period of limitation, nature of services provided, waiver of pre-deposit, exercise of discretion by the Tribunal.

Analysis:

The appellant challenged the order of the Customs, Excise and Service Tax Appellate Tribunal, which directed a deposit of Rs. 11 lacs against the requirement of pre-deposit of service tax, interest, and penalty. The appellant argued that the Tribunal failed to consider the strong prima facie case and the time-barred nature of the demand due to alleged suppression. Reference was made to judgments emphasizing the requirement for the Tribunal to assess time-barred demands in waiver of pre-deposit applications.

The department contended that the appellant lacked cooperation by withholding facts from the authorities for an extended period. The appellant's actions, including non-appearance and delayed submission of required documents, were highlighted. The department also raised the issue of whether the services provided fell under "maintenance or repair" or "reconditioning," citing relevant case law to support their position.

The Court examined the submissions and determined that the limitation was extendable under the proviso to Section 11AC of the Central Excise Act. The Commissioner (Appeals) found sufficient grounds to invoke the extended period of limitation based on the appellant's actions, such as avoiding appearances and incomplete information submission.

It was established that the appellant was registered for payment of service tax on specific services and had undertaken activities related to maintenance and repair of Sugar Mill Rollers. Both the Adjudicating Authority and the Appellate Authority concluded that the appellant's activities fell within the definition of 'maintenance or repairs.'

The Tribunal was found to have considered the relevant issues diligently and adopted a lenient approach by requiring only a 25% deposit of the demand as a precondition for the appeal. The Court noted that the appellant did not claim hardships before the Tribunal or the Court, and upheld the Tribunal's exercise of discretion without any legal errors justifying interference.

Ultimately, the Central Excise Appeal was dismissed, affirming the Tribunal's decision regarding the deposit requirement.