2020 (1) TMI 527 - AT - Service Tax

CENVAT Credit - Erection, Commissioning or Installation Services - irregular availment of CENVAT credit of central excise duty paid on said materials which were not legally eligible - extended period of limitation - HELD THAT - In the present case, since the credit amount is legally not eligible, the appellant is not contesting the demand on merits but only on limitation. The appellant has submitted that credit has been availed wrongly without any intent to evade payment of service tax - in the course of adjudication, the appellant specifically submitted the plea that they disclosed details of availment of credit in the ST-3 returns and that there is no evidence to the contrary to prove that credit has been willfully availed to defraud the Revenue - In the instant case, the SCN has not shown any positive evidence to prove wilful fraud or suppression to justify invocation of extended period of limitation. The appellant s case succeeds on limitation - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of service tax, irregular availment of CENVAT credit, imposition of penalty, limitation on recovery of credit amount, intention to evade payment of service tax.

Analysis:
The appellant, engaged in taxable services, faced a demand of service tax, interest, and penalty due to irregular availment of CENVAT credit on materials supplied under separate contracts. The appellant contested the demand primarily on the grounds of limitation, arguing that the details were disclosed in service tax returns and there was no intent to evade tax. The appellant relied on tribunal decisions emphasizing disclosure of credit details and absence of suppression to support their case. The Ld. Advocate argued that since the credit was voluntarily reversed upon realization of ineligibility, charging interest was unwarranted. The Revenue, however, maintained that the appellant was not entitled to the credit and should repay the utilized amount along with interest. The Tribunal noted that the appellant did not contest the demand on merits but solely on limitation. It observed that the SCN lacked evidence of willful fraud or suppression to justify invoking an extended limitation period.

The Tribunal referenced a previous case to highlight that mere non-disclosure of specific details, not required by statutory provisions, does not constitute suppression or concealment. Relying on this precedent, the Tribunal concluded that the demand was time-barred due to lack of evidence supporting willful fraud or suppression. Consequently, the impugned demand was set aside, and the appeal was allowed with appropriate relief as per the law. The judgment emphasized the importance of statutory requirements for disclosure and the absence of evidence to support allegations of intentional evasion. The decision underscored the significance of adherence to legal provisions and the burden of proof in establishing fraudulent intent in tax matters.