2016 (3) TMI 521 - AT - Service Tax

Invocation of extended period - Period of limitation - cenvat credit on tower components - duty demand - Held that - On perusal of the documents, it is seen that there is no categorical evidence for due service of notice issued on 6.12.2010. In the absence of a clear evidence to that effect it is to be concluded that the notice dated 6.12.2010 was not evidenced to have been served prior to 12.01.2012. Admittedly, the issue involved here is the eligibility of various tower components, which were classifiable under Chapter 72/73 of the Central Excise Tariff Schedule, which has been a matter of dispute before the various judicial forums. Neither the original order nor the impugned order specifically elaborates the grounds on which the element of suppression, fraud, collusion or willfully mis-statement can be alleged and sustained against the appellant. The only ground mentioned is that under Self-assessment Scheme, the appellant/assessee should have been taken credit only on eligible items. Failure to do so will result in invocation of extended period. Find that such reasoning is not sustainable either in law or on fact. Considering the issue involved has been the subject matter of interpretation before the various authorities including courts, the invocation of extended period in the present set of facts cannot be sustained. Accordingly, the impugned order, in so far as it relates to the cenvat credit on tower components, is not sustainable on the ground of time bar and hence, is set aside - Decided in favour of assessee

Summary

Issues:
1. Time bar on proceedings due to non-service of show cause notice.
2. Eligibility of cenvat credit on tower components.

Analysis:
1. Time bar on proceedings due to non-service of show cause notice:
The appeal revolved around the issue of whether the proceedings initiated against the appellant were time-barred due to the non-service of the show cause notice. The appellant contended that the proceedings were vitiated by the non-service of the notice dated 6.12.2010. The counsel argued that the notice was not received by them until 12.1.2012, which rendered the proceedings time-barred. The appellant emphasized that there was no suppression, fraud, collusion, or willful misstatement on their part. The appellant also cited the decision of the Hon'ble Bombay High Court in a similar case under the Customs Act to support their argument. The Tribunal observed that there was no clear evidence of the due service of the notice before 12.01.2012. The Tribunal concluded that the notice was not served within the prescribed time, and as the issue of tower components' eligibility for cenvat credit was a matter of dispute, the proceedings were time-barred. The Tribunal set aside the impugned order on this ground, allowing the appeal.

2. Eligibility of cenvat credit on tower components:
The dispute also centered around the eligibility of the appellant to claim cenvat credit on certain tower components. The Original Authority had confirmed the recovery of cenvat credit taken on tower materials and imposed penalties. On appeal, the Commissioner (Appeals) upheld the demand for cenvat credit but reduced the penalty. The appellant argued that they had not willfully suppressed any facts and had been filing regular statutory returns, including the tower materials for which credit was claimed. The Tribunal noted that the issue of tower components' eligibility had been a subject of interpretation before various authorities and courts. The Tribunal found that the reasoning for invoking the extended period due to the self-assessment scheme was not sustainable in law or fact. As the issue was a matter of interpretation and had been disputed in judicial forums, the Tribunal held that the impugned order regarding the cenvat credit on tower components was not sustainable on the ground of time bar and set it aside, allowing the appeal.