2018 (3) TMI 1131 - AT - Service Tax

Extended period of limitation - suppression of facts - CENVAT credit - GTA Service - Held that - from the ST-3 Returns filed by appellant, it is found that nowhere it had stated that input services with regard to disputed GTA service was received by them during the relevant period for the trading activities. Therefore, the Department was not aware about taking of irregular credit by the appellant - Since, the Department acquired the knowledge about taking of irregular credit during the course of audit of books of accounts, and thereafter the SCN was issued within one year from the relevant date, the same is not barred by limitation of time - appeal dismissed.

Summary

Issues:
Show cause proceedings barred by limitation of time.

Analysis:
The appeal was against an order passed by the Commissioner (Appeals) regarding the availing of cenvat credit amounting to a specific sum based on invoices issued by a transporter for the transportation of vehicles. The Department initiated show cause proceedings against the appellant, culminating in an adjudication order confirming the cenvat demand and imposing penalties. The appellant contended that the show cause proceeding was time-barred as the notice was issued after the normal period provided under Section 73(1) of the Act. The appellant argued that the Department was aware of the activities regarding cenvat credit based on the ST-3 Returns filed for the relevant period.

The appellant's advocate argued that since the facts were known to the Department at the time of filing the returns, the show cause notice issued beyond the normal period was barred by limitation of time. On the contrary, the Department's representative contended that the ST-3 returns did not mention that the GTA services were received for trading motor vehicles, indicating that the Department was unaware of the irregular credit availed by the appellant. The Department stated that the show cause notice was issued within the normal period after discovering the irregular credit during the audit.

The Tribunal found that the appellant was not entitled to take cenvat credit on the GTA service for trading purposes. It was noted that the ST-3 Returns did not mention the input services related to the disputed GTA service for trading activities, indicating that the Department was unaware of the irregular credit. Since the Department acquired knowledge of the irregular credit during the audit and issued the show cause notice within one year from the relevant date, the Tribunal held that the proceedings were not barred by limitation of time. Consequently, the appeal filed by the appellant was dismissed.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) regarding the cenvat credit availed by the appellant, ruling that the show cause proceedings were not time-barred.