2015 (1) TMI 89 - AT - Service Tax

Waiver of pre deposit - Admissibility of Cenvat credit - inputs and capital goods and input services used in the erection of transmission towers and shelters spread all over the country - wilful mis-statement/suppression of facts - Held that - period involved in this case is 2004 to 2008 which is prior to 2010 when the decision of Larger Bench of CESTAT in the case of Vandana Global (2009 (5) TMI 47 - CESTAT, NEW DELHI) was delivered. Thus the observation in the Show Cause Notice that the appellants knew that taking the impugned credit of service tax was irregular hardly sustains. Indeed in a scenario where divergent decisions had been delivered by CESTAT, the extended period is held to be non-invokable by Kerala High Court in the case of Binani Zinc Vs. ACCE Cochin - 1994 (10) TMI 74 - HIGH COURT OF KERALA AT ERNAKULAM and by CESTAT in the case of Laxmi Cement Vs. CCE, Jaipur-I - 2004 (5) TMI 362 - CESTAT, NEW DELHI Further, in the case of Gopal Zarda Udyog Vs. CCE - 2005-TIOL-123--CEX-LB Supreme Court observed that mere failure or negligence on the part of the manufacturer does not attract the extended period. In the case of CCE Vs. Chemphar Drugs Liniments - 1989 (2) TMI 116 - SUPREME COURT OF INDIA , Supreme Court held that something positive other than mere failure on the assessee part or conscious withholding of information when assessee knew otherwise is required for invoking for extended period. As is evident from the foregoing the Show Cause Notice or the impugned order arguably scarcely brings out any negligence or failure on the part of the appellants. Appellants have been able to make out a good case in their favour on the ground that the demand is barred by limitation. Accordingly, we waive the pre-deposit and stay recovery of the adjudicated liabilities during pendency of the appeal - Stay granted.

Summary

Issues:
Admissibility of Cenvat credit on inputs, capital goods, and input services used in the erection of transmission towers and shelters far from office premises; Allegations of wilful mis-statement/suppression of facts; Barred by time or not.

Admissibility of Cenvat Credit:
The case involved the admissibility of Cenvat credit on inputs, capital goods, and input services used in the erection of transmission towers and shelters spread across the country. The appellants argued that they regularly submitted periodical returns reflecting the impugned credits and had been audited by the department. They cited previous CESTAT judgments allowing such credits. The adjudicating authority alleged wilful mis-statement/suppression of facts, contending that the appellants knew the credit was irregular. Divergent judgments existed on the admissibility of such credits, with some holding them admissible while others did not.

Allegations of Wilful Mis-statement/Suppression:
The adjudicating authority accused the appellants of wilful mis-statement/suppression of facts regarding the Cenvat credit. However, the Show Cause Notice and the adjudication order lacked specific details on what was suppressed or mis-stated by the appellants. The appellants argued that they had not concealed any information and had regularly disclosed the impugned credits in their returns. The issue of wilful suppression was further complicated by divergent CESTAT judgments on the admissibility of similar credits.

Barred by Time:
The appellants contended that the entire demand was barred by time, as the Show Cause Notice was issued after a significant period from the relevant period. They argued that prior to centralised registration, they were complying with the requirements of filing returns and disclosing the credit. The Tribunal noted that there were divergent views on the admissibility of the credit until a Larger Bench decision in 2010 provided clarity. Considering the lack of evidence of wilful suppression and the extended period being non-invocable in certain cases, the Tribunal held that the demand was barred by limitation.

In conclusion, the Tribunal found in favor of the appellants, waiving the pre-deposit and staying the recovery of adjudicated liabilities during the appeal process. The judgment highlighted the complexities surrounding the admissibility of Cenvat credit, the lack of clarity on wilful mis-statement/suppression allegations, and the significance of the limitation period in such cases.