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2019 (5) TMI 1620 - AT - Central ExciseCENVAT Credit - input services - services used for setting up of the factory or the business premises - Appellant has acquired the land and paid compensation and also constructed rehabilitation and resettlement colony for displaced person - Time Limitation - period involved is April, 2012 to March, 2016 - SCN issued on 12.4.2017 - HELD THAT - The input services is required for setting up of the Aluminium Smelter plant by the Appellant in the process the Appellant has acquired the land and paid compensation and also constructed rehabilitation and resettlement colony for displaced person. This was required for setting up of the plant which would be required for manufacturing of the final products by the Appellant in their manufacturing plant. Accordingly, the Cenvat credit on the input services have been used in or in relation to setting up of the plant, which is covered under the main clause of definition of input service. Invocation of extended period of limitation - suppression of facts or not - HELD THAT - The issue has been detected by the audit conducted in the Appellant s factory by the Department. It is admitted fact that the Appellant has taken Central Excise registration in the year 2009 and also started filing ER-1 returns with the Department. In such a circumstances, the extended period for raising demand is not available to the Appellant. The similar issue has been decided by this Tribunal in their own case HINDALCO INDUSTRIES LTD VERSUS C.C.E ST, JABALPUR 2018 (10) TMI 392 - CESTAT NEW DELHI where it was held that There is no allegation of fraud, suppression, or falsification of records. The issue is simply of interpretation. The invocation of the extended period of limitation is bad and the Show Cause Notice is not maintainable on this ground. The demand is barred by limitation, without going into the merits of the case - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Invocation of extended period of limitation. 2. Eligibility of Cenvat credit on various input services. 3. Justification of penalty imposition. Detailed Analysis: 1. Invocation of Extended Period of Limitation: The Appellant contested the invocation of the extended period of limitation, arguing that the Show Cause Notice (SCN) issued for the period April 2012 to March 2016 on 12.04.2017 was beyond the permissible period. The Appellant had taken Central Excise registration in June 2009 and regularly filed ER-1 returns, indicating the Cenvat credit availed. The Tribunal referenced the Hon’ble MP High Court decision in CCE, Indore Vs. Zyg Pharma Pvt. Ltd. and concluded that the issue pertained to the interpretation of availment of Cenvat credit, not suppression of facts. Consequently, the extended period of limitation was deemed inapplicable. 2. Eligibility of Cenvat Credit on Various Input Services: The Appellant availed Cenvat credit on several input services necessary for setting up their Aluminium Smelter Plant, including architectural and technical advisory consultancy, consulting engineers’ services, technical consultancy services, erection, commissioning and installation services, technical inspection and certification agency services, construction services, works contract services, liaison services for forest and railway clearance, and loan processing charges by banks. The Tribunal noted that these services were essential for setting up the plant and thus covered under the main clause of the definition of input service. The Tribunal cited previous rulings, including their own case (Hindalco Industries Ltd.), which supported the Appellant's claim that the services were integral to the manufacturing process and thus eligible for Cenvat credit. 3. Justification of Penalty Imposition: The Department argued that due to the amendment in the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004, effective from 01.04.2011, the word "setting up" was deleted, making the Cenvat credit on input services used for setting up the factory unavailable to the Appellant. The Department also justified the invocation of the extended period based on the audit findings and claimed suppression of facts by the Appellant. However, the Tribunal found no evidence of fraud, suppression, or falsification of records by the Appellant. The Tribunal referenced several case laws, including the High Court of Karnataka in Commissioner of Central Excise, Bangalore v. Sanmar Speciality Chemicals Ltd., which held that the extended period of limitation is not invocable in the absence of suppression or misrepresentation. Consequently, the Tribunal ruled that the demand was barred by limitation and set aside the penalty. Conclusion: The Tribunal allowed the appeal on the issue of limitation, setting aside the impugned order without delving into the merits of the case. The Appellant was entitled to consequential benefits in accordance with the law. The decision emphasized that the extended period of limitation was not applicable due to the lack of suppression or misrepresentation by the Appellant.
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