2017 (3) TMI 1363 - AT - Central Excise

CENVAT credit - service tax in respect of GTA services for the transportation of traded goods - - Since the same truck is used for both manufactured as well as traded goods CENVAT credit of service tax on GTA is availed for the same truck and that no separate credit on GTA is availed by them for transport of traded goods - extended period of limitation - Held that - it cannot be stated that the appellant has not cooperated with the Department and has suppressed facts - prior to inclusion of trading in the definition of exempted service there was confusion as to whether it would fall under exempted service and whether the credit can be availed on input services used for trading activity - reliance was placed in the case of Krishna Auto Sales vs. CCE&ST Chandigarh-l 2015 (10) TMI 979 - CESTAT NEW DELHI where it was held that the issue was an interpretational one and extended period is not invokable - extended period not sustainable - The demand along with interest thereon for the normal period is sustained and the appellant is liable to pay the same - appeal disposed off - decided partly in favor of appellant.

Summary

Issues involved:
1. Admissibility of CENVAT credit for GTA services related to transportation of traded goods.
2. Validity of demand for the extended period due to alleged willful suppression of facts by the appellant.

Analysis:
1. The case involved the appellants availing CENVAT credit for service tax paid on GTA services for transporting both dutiable products and traded goods. The Department contended that the credit for GTA services related to traded goods was inadmissible. Show-cause notices were issued alleging irregular credit availment, leading to a confirmation of demand, interest, and penalty by the original authority. The Commissioner(Appeals) upheld the demand and interest but set aside the penalty. The Tribunal, in Final Order No.A/30940/2016, upheld the setting aside of the penalty, dismissing the Department's appeal. The present appeal by the appellant contested the confirmation of demand and interest. The appellant argued that confusion existed regarding trading being exempted service before 01/04/2011 amendment to CENVAT Credit Rule. The Tribunal found that the demand for the extended period was not sustainable due to interpretational issues and lack of cooperation from the Department, modifying the impugned order accordingly.

2. The Department alleged willful suppression of facts by the appellant, justifying the invocation of the extended period for raising the demand. The appellant's failure to provide data promptly was highlighted, with the Department claiming the appellant cooperated late in the process. However, the appellant contended that they had responded to the Department's queries and that confusion regarding the treatment of trading activities prior to the 2011 amendment played a role. The Tribunal found that the appellant had cooperated by responding to the Department's letters and that the issue was interpretational rather than a deliberate attempt to suppress facts. Citing precedents, the Tribunal held that the demand for the extended period was not sustainable, upholding the demand and interest for the normal period while setting aside the demand for the extended period.

In conclusion, the Tribunal allowed the appeal partly, modifying the impugned order to exclude the demand for the extended period while upholding the demand and interest for the normal period. The judgment clarified the admissibility of CENVAT credit for GTA services related to traded goods and addressed the issue of willful suppression of facts in determining the validity of demands for extended periods.