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2018 (11) TMI 1209 - AT - Service TaxExtended period of limitation - Department, being in the knowledge of all the facts since 23.11.2009, issued the SCN only on 22.03.2013 i.e. after around more than three years which is beyond the period of limitation - Held that - The assessee-appellants have deposited the Service Tax along with interest, but, inadvertently, under different head. The assessee-appellants had reversed the Credit wrongly availed by them for the period under dispute much before the issuance of the show cause notice. Hence, bonafide of assessee-appellants cannot be questioned - Penalty also do not sustain. Appeal allowed - decided in favor of assessee-appellants.
Issues involved:
1. Extended period of limitation invoked by the Department. 2. Appropriation of amounts and imposition of penalty. 3. Dispute regarding payment of Service Tax and Cenvat Credit. Extended period of limitation invoked by the Department: The appeal was filed against the Order-in-Original passed by the Commissioner of Customs, Central Excise & Service Tax, Noida for the period January to September 2009. The Department alleged that the assessee-Appellants deliberately violated the law by not filing ST-3 returns and availing Cenvat Credit. The Department issued a show cause notice after an inordinate delay of around three and a half years, invoking the extended period of limitation. However, the assessee-Appellants argued that they had acted bonafidely and had actually deposited the Service Tax and interest, albeit under a different head. They also reversed the wrongly availed Cenvat Credit before the notice was issued. The Tribunal found that the Department's delay in issuing the notice was beyond the period of limitation and that the bonafide actions of the assessee-Appellants could not be questioned. The Tribunal cited precedents to support its decision and concluded that the penalty imposed should not be sustained. Appropriation of amounts and imposition of penalty: The Department had rejected the submission of the assessee-Appellants regarding the invocation of the extended period of limitation and confirmed the appropriation of amounts along with the imposition of a penalty equivalent to the amount. However, the Tribunal noted that the assessee-Appellants had not disputed the appropriation of amounts and had only challenged the penalty. The Tribunal observed that the assessee-Appellants had deposited the Service Tax and interest, albeit under a different head, and had also reversed the wrongly availed Cenvat Credit before the show cause notice was issued. Relying on legal precedents, the Tribunal held that there was no reason to sustain the penalty imposed, and consequently, the appeal filed by the assessee-Appellants was allowed with consequential benefit. Dispute regarding payment of Service Tax and Cenvat Credit: The Department alleged that the assessee-Appellants had failed to discharge their liability of paying Service Tax and interest, as well as interest on wrongly availed Cenvat Credit. However, the assessee-Appellants argued that there was no difference in the quantum of amount received for services and the amount of Service Tax paid. They contended that they had acted bonafidely and that the extended period of limitation should not have been invoked. The Tribunal found that the assessee-Appellants had indeed deposited the Service Tax and interest, albeit under a different head, and had reversed the wrongly availed Cenvat Credit before the issuance of the show cause notice. The Tribunal, therefore, concluded that the bonafide actions of the assessee-Appellants could not be questioned and decided in favor of the assessee-Appellants, allowing the appeal with consequential benefit.
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