2018 (2) TMI 1183 - AT - Service Tax

CENVAT credit - extended period of limitation - Held that - the appellant availed the credit on the basis of the documents prepared in ERP System. Apparently there is a doubt on availment of the credit on trading goods. In any event, there is no material available on record of suppression of facts with intent to evade payment of tax. The Tribunal in the case of Rajasthan Renewable Energy Corporation Limited Vs. Commissioner of Central Excise, Jaipur 2016 (12) TMI 342 - CESTAT NEW DELHI allowed the appeal of the assessee on the ground that the assessee being a State Government Enterprise, the allegation of lawful mis-statement, suppression of facts with intent to evade payment of duty cannot be made. The demand of CENVAT Credit for the extended period of limitation cannot be sustained and the penalty is also liable to be set aside - appeal allowed - decided in favor of appellant.

Issues:
1. Irregular availing of CENVAT Credit on Goods Transport Agency Services for trading purposes.
2. Substantiation of plea for CENVAT Credit on transportation charges.
3. Allegation of suppression of facts with intent to evade tax.
4. Invocation of extended period of limitation without suppression of facts.
5. Applicability of penalty in case of non-payment of service tax by a Public Sector Undertaking.

Analysis:
1. The case involved the appellants engaged in refining crude oil into petroleum products who availed CENVAT Credit on inputs, capital goods, and input services. A Show Cause Notice alleged irregular availing of CENVAT Credit on Goods Transport Agency Services for trading purposes during 2006-07 to 2008-09. The Adjudicating authority disallowed the credit, imposed interest and penalty, upheld by the Commissioner (Appeals), leading to the appeal.

2. The appellant contended that they did not avail credit on traded goods, relying on system-generated reports mapping eligible credit. However, the Commissioner (Appeals) found the appellant failed to substantiate this claim with documentary evidence. The Tribunal noted doubts on availing credit on trading goods but found no evidence of intent to evade tax.

3. The Tribunal referred to a case where the allegation of suppression of facts with intent to evade payment of duty was not upheld for a State Government Enterprise. The absence of material on record regarding the suppression of facts led to the allowance of the appeal by the Tribunal.

4. Referring to a case where the extended period of limitation was not invoked without suppression of facts, the Tribunal highlighted the importance of evidence in invoking such periods. In the absence of any cogent reason or suppression, the Tribunal set aside the demand for the extended period of limitation.

5. In a case involving a Public Sector Undertaking, the Tribunal held that the longer limitation period for demand of non-paid service tax could not be invoked without evidence of wilful misstatement, suppression of facts, or deliberate contravention of rules. Consequently, the demand for CENVAT Credit for the extended period of limitation was not sustained, and the penalty was set aside, leading to the allowance of the appeal.

This detailed analysis of the judgment highlights the key issues, arguments presented, legal precedents referenced, and the ultimate decision reached by the Tribunal.

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