2008 (9) TMI 159 - AT - Service Tax

Whether the service tax paid in respect of erection and commissioning services used by respondent for erection and commissioning of wind turbine generator at place away from the factory is available in terms of Rule 6 of Cenvat Credit Rules, 2004 or not there is no misstatement or suppression with an intent to evade payment of duty on the part of the appellant - demand, having been raised on 13-7-07 for the period 9-11-05 when the credit was availed, is required held as barred by limitation

Summary

Issues: Availability of Cenvat credit for service tax paid on erection and commissioning services used for wind turbine generator away from the factory, and the point of limitation in issuing the show cause notice.

Analysis:

1. Availability of Cenvat Credit: The main issue in the appeal was whether the service tax paid for erection and commissioning services used away from the factory is eligible for Cenvat credit under Rule 6 of the Cenvat Credit Rules, 2004. The appellant's advocate acknowledged a previous Tribunal decision that went against their position. However, he contested the impugned order on the grounds of limitation. The appellant had taken the credit on 9-11-05, and the show cause notice was issued on 13-7-07. The advocate argued that as the credit was taken in good faith and reflected in statutory records, there was no malafide intent, and hence, the notice issued after the normal limitation period should be considered barred.

2. Limitation Issue: The advocate further contended that there was no misstatement or suppression with the intent to evade duty on the part of the appellant. As per the advocate's argument, since the demand was raised on 13-7-07 for a period starting from 9-11-05 when the credit was availed, it should be considered as barred by limitation. The Tribunal agreed with the advocate's contention that in the absence of any intent to evade duty, the longer period of limitation should not be available to the Revenue. Consequently, the appeal was allowed on this point.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the demand raised beyond the normal limitation period was not valid due to the absence of any misstatement or intent to evade duty. The judgment highlighted the importance of bona fide interpretation of the law and the significance of reflecting credits in statutory records.