2015 (11) TMI 512 - AT - Central Excise

Duty demand - Invocation of extended period of limitation - Held that - appellant did raise the ground of time bar before the lower authorities and in the grounds of appeal before this Bench. There is thus a mistake apparent from the face of records and the same needs rectification by giving suitable observations on time barred nature of demand. - The ingredients for imposing equivalent penalty under the provisions of Rule 15 are the same what are required for invokation of extended period. In the light of the opinion given by this Bench it was an interpretational dispute, therefore, it cannot be held that appellant had any intention to evade duty or take wrong CENVAT credit deliberately. Accordingly, it is held that extended period is not invokable in these proceedings. - Decided in favour of assessee.

Summary

Issues involved:
1. Time bar of demand for extended period
2. Imposition of penalties

Analysis:

Issue 1: Time bar of demand for extended period
The appellant filed a ROM against the order passed by the Bench upholding the demand for an extended period but setting aside the penalty. The appellant argued that the issue of time bar of demand was raised before the lower authorities and this Bench. The appellant contended that no findings were provided on the time bar aspect in the order passed by this Bench. The appellant relied on the case law of AARPEE Electricals (P) Ltd. vs Commissioner of Central Excise, Bangalore [2005 (189) E.L.T. 437 (Tri.-Bang.)]. The Revenue, represented by Shri S. Shukla, argued that the case was detected by audit and the appellant did not inform the Revenue about the services availed before a certain date. The Revenue defended the penalties imposed by the lower authorities. After hearing both sides and examining the case records, it was observed that the appellant did raise the issue of time bar before the authorities and in the grounds of appeal. The Bench noted a mistake in the records and emphasized the need for rectification by providing suitable observations on the time-barred nature of the demand.

Issue 2: Imposition of penalties
The Bench, in its order dated 30.10.2014, did not impose penalties based on the factual matrix related to the payment of Service Tax liability. The Bench concurred with the findings of the first appellate authority regarding the interpretation of Rule 3 of the CENVAT Credit Rules, 2004. It was mentioned that the penalties imposed on the appellant were set aside due to a question of interpretational error. The Revenue did not challenge the order regarding the non-imposition of penalties. The Bench held that the extended period was not applicable in this case as it was an interpretational dispute, and the demand was considered time-barred. The Show Cause Notice was issued beyond the normal period of limitation. The Bench referred to a similar view taken by CESTAT Bangalore in a related case. Consequently, the ROM filed by the appellant was allowed, and the ROM filed by the Revenue was rejected on the grounds that the Bench cannot review its own orders on merits.

In conclusion, the judgment focused on the issues of time bar of demand for an extended period and the imposition of penalties, ultimately ruling in favor of the appellant based on the interpretation of relevant legal provisions and case law.