2016 (12) TMI 1181 - AT - Service Tax

CENVAT credit - centralised registration - utilisation of credit taken in one unit with respect to other units - Held that - A case cannot be held against the Respondent based on presumptions, assumptions and surmises which are not even a part of the show cause notice dated 31.03.2013 After taking of centralized registration in 2013 respondent was having more than one units which were existing during the earlier period also. It is observed from the case records that the fact of having more than one manufacturing unit all over the country was taken up for the first time by the Revenue before the first appellate authority and then before this Bench. Ld.Commissioner(Appeals) under Order-in-Appeal dated 29.07.2015 has correctly discussed in para 9 that the grounds now brought in by the department were not the subject matter of the show cause notice - appeal dismissed - decided against revenue.

Summary

Issues:
Appeal against Order-in-Appeal dismissing Revenue's appeal, Centralized registration and credit availed by the respondent, Existence of multiple manufacturing units, Normal period of limitation for demand, Grounds not part of show cause notice, Presumptions and assumptions in the case.

Analysis:

1. Centralized Registration and Credit Availed:
The Revenue contended that the respondent, with centralized registration in 2013, had multiple units across India, leading to availing credit on services paid by the headquarters. However, the respondent argued that before centralized registration, they had only one manufacturing unit at Dankuni. The first appellate authority noted that the show cause notice did not mention multiple units, and the grounds raised later were beyond the notice's scope. The Bench agreed, emphasizing that presumptions and assumptions not in the notice cannot form the basis for a case against the respondent.

2. Normal Period of Limitation:
The Revenue sought demand for the period 2008-09 to 2011-12, but the first appellate authority held it beyond the normal limitation period. The Bench concurred with this view, stating that grounds not part of the original show cause notice could not be considered for continuing the proceedings. The absence of evidence showing credit taken by the Dankuni unit for services from other units further weakened the Revenue's case.

3. Dismissal of Appeal:
Ultimately, the appeal filed by the Revenue was dismissed based on the findings that the new grounds introduced by the department were not part of the initial show cause notice. The judgment highlighted the importance of sticking to the issues raised in the notice and not building a case on assumptions or presumptions. The decision upheld the principle that a case must be established on facts within the scope of the original allegations.

In conclusion, the judgment of the Appellate Tribunal CESTAT Kolkata upheld the dismissal of the Revenue's appeal, emphasizing the need for adherence to the issues raised in the show cause notice and rejecting claims based on assumptions not supported by evidence within the notice's ambit.