2018 (11) TMI 618 - AT - Central Excise

Invocation of extended period of limitation - malafide intent or not - a view was undertaken that the assessee should have paid Central Excise duty instead of paying the service tax - Held that - The appellant registered themselves with the service tax department and started paying service tax by treating the activities undertaken by them as providing of services. In such a scenario, no suppression or malafide can be attributed to them, so as justifiable invoking longer period of limitation - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the appellant should have paid Central Excise duty or service tax for fabricating underground storage tanks.
2. Whether the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944, should be invoked.
3. Whether the Commissioner (Appeals) decision to reject the appeal filed by the Revenue is justified.

Analysis:
1. The respondent started paying service tax instead of Central Excise duty for fabricating underground storage tanks for M/s. Indian Oil Corporation from November 2004. The officers visited the factory on 26/12/2007 and opined that Central Excise duty should have been paid. Subsequently, proceedings were initiated for confirmation of excise duty. The Commissioner (Appeals) confirmed the demand within the normal period but extended the benefit of limitation. The Revenue appealed against this decision.

2. The Commissioner (Appeals) considered the issue of applicability of the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944. It was noted that the appellant had informed the department about the switch to service tax from Central Excise in October 2004. The department was aware of the activities carried out by the appellants, and there was no suppression of material facts to evade payment of Central Excise duty. Therefore, the Commissioner (Appeals) concluded that the extended period cannot be invoked in this case. The appellant's registration with the service tax department and payment of service tax indicated no malafide intent or suppression on their part.

3. The Tribunal upheld the decision of the Commissioner (Appeals) to reject the appeal filed by the Revenue. It was noted that the appellant's actions of registering with the service tax department and paying service tax based on their interpretation of providing services did not warrant the invocation of the extended period of limitation. The Tribunal found no infirmity in the Commissioner (Appeals) reasoning and concluded that no suppression or malafide intent could be attributed to the appellant in this case, leading to the rejection of the Revenue's appeal.