2019 (1) TMI 1177 - AT - Service Tax

Extended period of limitation - no suppression of facts - CENVAT Credit - angles, channels, and other parts used to construct tower or shelters or affixation of towers are obtained in Completely Knock down (CKD) condition. At the site, they are bolted and placed on a platform either on the ground or on top of the building to ensure that there is no vibration to the towers and the same can be dismantled again and moved to a different place and erected again - movable goods or not. Held that - The period of dispute is from 2009-2010 to 2011-12 whereas the show-cause notice was issued on 20.10.2014 which is completely barred by limitation. Further, the Revenue has invoked extended period of limitation on the ground that the appellant has suppressed the information from the Department whereas the fact of the matter is that the appellant have not suppressed any information from the department with the intention to evade payment of duty and they have been filing the returns showing the CENVAT credit on towers and tower materials. It is also a fact that this issue relates to interpretation of complex legal provision and the matter was referred to the Larger Bench who decided the same in favour of the Revenue - entire demand is barred by limitation and therefore, the entire demand is set aside. On merits, there is a conflict of decision between the Hon ble High Court of Mumbai and the Hon ble High Court of Delhi but since I am allowing the appeal of the appellant on limitation, I need not go to the merits of the case - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Eligibility of CENVAT credit on goods used for erecting towers and prefabricated buildings/shelters.
2. Invocation of the extended period of limitation.
3. Allegation of suppression of facts with the intention to evade duty.

Issue-wise Detailed Analysis:

1. Eligibility of CENVAT Credit on Goods Used for Erecting Towers and Prefabricated Buildings/Shelters:
The appellant, a provider of telecommunication services, availed CENVAT credit on goods like channels, beams, and prefabricated buildings/shelters, treating them as capital goods. The Revenue contended that these items, being attached to earth, are not excisable goods and thus ineligible for CENVAT credit. The appellant argued that these goods were movable at the time of receipt and could be dismantled and re-erected, thus qualifying as capital goods. The appellant cited the Hon’ble High Court of Delhi’s decision in their own case, which supported their stance that the eligibility for CENVAT credit should be determined at the time of receipt of goods. The Tribunal noted the conflict in decisions between the Hon’ble High Courts of Mumbai and Delhi but did not delve into the merits due to the resolution of the case on the limitation issue.

2. Invocation of the Extended Period of Limitation:
The show-cause notice was issued on 20.10.2014 for the period 2009-10 to 2011-12, invoking the extended period of limitation. The appellant contended that the issue involved interpretational nature and cited various decisions, including their own case, where it was held that extended period could not be invoked in such cases. The Tribunal found that the appellant had been filing returns showing the CENVAT credit on towers and tower materials, and the issue was related to the interpretation of complex legal provisions. The Tribunal cited the Hon’ble Supreme Court’s decision in Continental Foundation JT. Venture vs. CCE, Chandigarh-I, which held that extended period cannot be invoked when a matter is referred to a Larger Bench to resolve a conflict of opinion. The Tribunal also referred to its own decision in the appellant’s earlier case, which held that extended period could not be invoked in such cases.

3. Allegation of Suppression of Facts with the Intention to Evade Duty:
The Revenue alleged that the appellant suppressed information with the intention to evade duty. The appellant argued that the show-cause notice was issued based on information provided by them, and there was no suppression of facts. The Tribunal found that the appellant had not suppressed any information from the department with the intention to evade duty and had been filing returns showing the CENVAT credit on towers and tower materials. The Tribunal referred to the Hon’ble Supreme Court’s decision in Pushpam Pharmaceuticals Company vs. CCE, which held that mere omission to disclose correct information is not suppression unless it is deliberate to escape duty payment.

Conclusion:
The Tribunal concluded that the entire demand was barred by limitation and set aside the impugned order. The Tribunal did not address the merits of the case due to the resolution on the limitation issue. The appeal was allowed with consequential relief, if any.

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