2017 (10) TMI 139 - AT - Service Tax

CENVAT credit - Capital goods - duty paying documents - it was alleged that the credit of duty involved in capital goods cannot be passed on or transferred without issuance of proper invoice under Rule 11 of CER, 2002 - time limitation - Held that - in the present case, the demand is raised by invoking extended period of limitation and the Revenue has already accepted the fact that extended period cannot be invoked, as also by appreciating that the appellant is a Public Sector undertaking and in the absence of any evidence, malafide cannot be attributed to them, it is fit to hold that the demand is barred by limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand raised on the appellant for availing wrongful credit.
2. Validity of demand raised invoking extended period of limitation.
3. Decision on the appeal and additional evidence filed by the appellant.

Analysis:
1. The appellant, a public sector undertaking providing telecommunication services, was issued a show cause notice for wrongfully availing credit based on documents issued by another office. The lower authorities confirmed a demand of &8377; 2,80,49,782 for the period from October 2008 to September 2012. The appellant was alleged to have passed on credit of duty involved in capital goods without proper invoice, violating Rule 11 of Central Excise Rules, 2002.

2. During the hearing, it was revealed that another order-in-original had dropped the demand on merits and limitation grounds. The Commissioner acknowledged the acceptability of the order and suggested that even if an appeal was filed before the Tribunal, the Revenue should acknowledge its error. Considering the invocation of the extended period of limitation in the present case, it was noted that the Revenue had already admitted in a previous matter that the extended period cannot be invoked. Moreover, due to the absence of evidence indicating malafide intentions on the part of the appellant, it was held that the demand was barred by limitation. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant. A miscellaneous application for filing additional evidence was also disposed of.

3. The Tribunal, comprising Mrs. Archana Wadhwa, Member (Judicial) and Mr. Devender Singh, Member (Technical), issued the order after hearing both parties represented by their respective counsels. The decision highlighted the significance of adherence to rules regarding credit transfer and the limitations on invoking extended periods for raising demands. The judgment provided consequential relief to the appellant based on the findings related to limitation and lack of evidence supporting any malafide actions.