2018 (1) TMI 1715 - HC - Central Excise

Extended period of limitation - Short payment of duty - intent to evade tax - HELD THAT - It is undisputed that the show cause notice invoked the extended period. That is beyond a normal period of one year. For the extended period to be invoked, there are certain pre-requisites and pre-conditions, which the Revenue has to satisfy in terms of the statutory provision, namely, section 11A of the Central Excise Act, 1944. The tribunal found from the factual matters that there were not one, but two audits and the second one was for the overlapping period. If during both, the Revenue could not trace out anything, which was held back by the assessee or was unable to unearth from the records the necessary materials to allege suppression, then, the invocation of the extended period was impermissible. There were no materials to indicate that there is any short payment of duty with intent to evade service tax. Once there is no perversity in the order under appeal nor the same is vitiated by any error of law apparent on the face of the record, then, we are not obliged to entertain this appeal. There is no substantial question of law arising for consideration. Consequently, the appeal fails and it is dismissed.

Summary

Issues:
1. Invocation of extended period under section 11A of the Central Excise Act, 1944.
2. Sufficiency of evidence for invoking extended period.
3. Allegation of suppression and intent to evade service tax.
4. Applicability of Division Bench judgment.
5. Existence of substantial question of law.

Analysis:

1. Invocation of extended period under section 11A of the Central Excise Act, 1944:
The judgment addresses the issue of invoking the extended period under section 11A of the Central Excise Act, 1944. It highlights that the show cause notice in question exceeded the normal one-year period, necessitating specific pre-requisites and conditions to be met by the Revenue. The Tribunal's decision was based on the presence of two audits, with the second audit covering an overlapping period. The judgment emphasizes that if the Revenue failed to uncover any evidence of suppression or intent to evade service tax during these audits, the invocation of the extended period would be unjustified.

2. Sufficiency of evidence for invoking extended period:
The judgment scrutinizes the sufficiency of evidence required to justify the invocation of the extended period. It emphasizes that the Revenue must provide substantial proof of short payment of duty with the intent to evade service tax. The absence of such evidence during the audits conducted was a crucial factor in determining the validity of extending the period for investigation.

3. Allegation of suppression and intent to evade service tax:
The judgment delves into the crucial aspect of whether there was any substantiated allegation of suppression or intent to evade service tax by the assessee. It underscores that the absence of material indicating any short payment with the intent to evade tax during the audits played a pivotal role in the decision-making process.

4. Applicability of Division Bench judgment:
The judgment also touches upon the relevance of a Division Bench judgment cited in the order under appeal. It clarifies that the Division Bench judgment relied upon did not align with the facts and circumstances of the present case, thereby emphasizing the importance of context-specific application of legal precedents.

5. Existence of substantial question of law:
Lastly, the judgment concludes by addressing the absence of any substantial question of law necessitating the court's consideration. It asserts that in the absence of perversity in the order under appeal or any glaring error of law, the appeal lacks merit. Consequently, the appeal is dismissed without any order as to costs, highlighting the clarity and finality of the decision rendered by the court.