2018 (9) TMI 377 - AT - Central Excise

Time Limitation - Show Cause Notice is issued on 17.03.2011 invoking the extended period - no suppression of facts - Commercial and Industrial Construction Service - shortfall in accounting of value - abatement under N/N. 1/2006-ST - Held that - The appellant has disclosed that they are availing the benefit of Notification 01/2006. As per the Notification, the benefit would not be eligible if the assessee avails credit on inputs/input services. However, the appellant has availed credit on certain input services. The same has been disclosed by them in the ST-3 returns by Column 5B - Thus, the Department was put to knowledge and it cannot be said that the appellants had suppressed any facts from the Department with an intention to evade payment of service tax - the extended period cannot be invoked. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Short payment of service tax for the year 2007-08
2. Eligibility for abatement under Notification 1/2006-ST
3. Allegations of suppression of facts and intention to evade payment of duty
4. Grounds of limitation for invoking the extended period

Analysis:
1. The case involved a Show Cause Notice issued to the appellants for a shortfall in accounting of service tax, leading to short payment of a specific amount for the year 2007-08. The appellants had partially rectified the shortfall but failed to pay the balance amount, resulting in a demand for the remaining liability.

2. The appellants had undertaken projects availing abatement under Notification 1/2006-ST but had also utilized input service tax credit, which was not permissible under the Notification. The Department alleged that the appellants were not eligible for the abatement due to availing CENVAT Credit, leading to a demand for the short payment and wrongly availed abatement, along with penalties.

3. The appellant's counsel argued on the ground of limitation, emphasizing that the entire demand was hit by limitation as there was no intentional suppression of facts to evade payment of duty. The appellant had disclosed details of availing abatement and CENVAT Credit in the ST-3 returns, asserting that there was no deliberate attempt to conceal information but rather an inadvertent accounting mistake.

4. The Tribunal found that the demand was indeed hit by limitation as the appellants had disclosed all relevant details in the ST-3 returns, including the wrongful credit availed. Since the Department was aware of this information, it was concluded that there was no suppression of facts to evade payment of service tax, thereby setting aside the impugned Order on the ground of limitation.

In conclusion, the appeal was allowed based on the finding that the demand was hit by limitation, and the appellants were granted consequential reliefs. The judgment highlighted the importance of disclosing accurate information in returns to avoid allegations of suppression of facts and emphasized the significance of adhering to the provisions of Notifications for availing benefits like abatement under service tax regulations.