2015 (10) TMI 2218 - AT - Service Tax

Disallowance of CENVAT Credit - Invocation of extended period of limitation - Suppression of facts - Held that - Commissioner (Appeals) has found that the issue involved is more in the nature of interpretation of law, and the facts placed on record do not suggest any malafide intention on the part of the appellants in the matter of availment of credit of duty and therefore, the said provisions of rule 15 of the Cenvat credit rules, 2004 are not invocable in this case for the purpose of imposition of penalty. Taking note of the same the Commissioner (Appeals) has set aside the penalty imposed. This being the facts the appellants do have a strong case of limitation in their favour. On such grounds I am of the view, that the demand is barred by limitation and therefore is unsustainable. - Decided in favour of assessee.

Summary

Issues: Challenge to disallowance of Cenvat credit on input services for the period April 2006 to March 2007.

The judgment pertains to an appeal challenging the disallowance of Cenvat credit on various input services for the period April 2006 to March 2007. The appellants, engaged in manufacturing activities, were issued a show cause notice proposing the disallowance of credit. The appellants contested the order on grounds of limitation and merits. The issue of contention revolved around the denial of credit on insurance service, vehicle maintenance service, courier service, and cell phone services. The Commissioner (Appeals) found no intention to evade payment of duty or avail wrongful credit, considering it a matter of interpretation of the law rather than malafide intent.

Regarding the issue of limitation, it was argued that the demand was time-barred as there was no suppression of facts or willful misstatement. The Commissioner (Appeals) concurred, observing that the matter primarily involved interpreting the definition of input services under the Central Excise Act, 1944, and thus, the extended period of limitation did not apply. Consequently, the penalty was set aside, and the demand was deemed unsustainable due to the absence of malafide intentions on the part of the appellants.

Given the favorable ruling on the limitation issue, the tribunal did not delve into the substantive merits of the case. Ultimately, the demand raised in the impugned order was set aside as time-barred and unsustainable, providing consequential relief to the appellants.