2024 (1) TMI 777 - AT - Service Tax

Extended period of limitation - irregular availment of CENVAT Credit - suppression of facts or not - whether the extended period of limitation under the proviso to section 73(1) of the Finance Act could have been invoked in the facts and circumstances of the case? - HELD THAT - The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word one year , the word five years has been substituted - the appellant had not suppressed any information from the department in the ST-3, returns nor is there any allegation in the show cause notice or a finding in the impugned order that a particular fact had not been disclosed since all that has been stated is that the appellant was not entitled to take CENVAT credit but as it had taken, it suppressed material facts from the department. It has been settled by the Supreme Court and the Delhi High Court that mere suppression of facts is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of service tax. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the assessee, the extended period of limitation cannot be invoked. The inevitable conclusion that follows from the aforesaid discussion is that the appellant had not suppressed facts, much less suppressed facts with an intention to evade payment of service tax. The extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act, therefore, could not have been invoked in the facts and circumstances of the present case. The impugned order dated 12.12.2014 passed by the Commissioner disallowing CENVAT credit taken by the appellant and ordering for its reversal with penalty and interest cannot, therefore, be sustained as the entire amount covered by the show cause notice and the order is under the extended period of limitation - it will not be necessary to examine whether the appellant had correctly availed CENVAT credit. The impugned order dated 12.12.2014 passed by the Commissioner is, therefore, set aside - appeal is allowed.

Summary

Issues Involved:
1. Entitlement to avail CENVAT credit.
2. Entitlement to refund under section 142(8) of the CGST Act.
3. Invocation of the extended period of limitation under the proviso to section 73(1) of the Finance Act.

Summary:

Entitlement to Avail CENVAT Credit:
The appellant, M/s Delhi Airport Metro Express Pvt. Ltd., availed CENVAT credit on service tax paid on input services received from outside India and countervailing duty (CVD) paid on imported goods used for activities under the Concession Contract with Delhi Metro Rail Corporation. The Commissioner disallowed the CENVAT credit amounting to Rs. 65,01,43,929/- and ordered its reversal/recovery with interest and penalty, asserting that the goods and services were used exclusively for non-taxable/exempt services related to the Airport Metro Express Line.

Entitlement to Refund:
If the appellant's claim for CENVAT credit is upheld, the issue arises whether the appellant is entitled to a refund of Rs. 65,01,43,929/- under section 142(8) of the CGST Act. The Tribunal did not examine this issue in detail as it set aside the Commissioner's order on the ground of limitation.

Invocation of Extended Period of Limitation:
The primary issue was whether the extended period of limitation under the proviso to section 73(1) of the Finance Act could be invoked. The Tribunal concluded that the extended period could not be invoked as the necessary ingredients, such as willful suppression of facts with intent to evade payment of service tax, were not present. The appellant had disclosed all relevant facts in the ST-3 returns, and the department was aware of the facts during the audit conducted in September 2010. The show cause notice issued on 20.07.2012 was beyond the one-year limitation period, and the Tribunal held that the appellant had not suppressed any information from the department.

Conclusion:
The Tribunal set aside the impugned order dated 12.12.2014 passed by the Commissioner, disallowing CENVAT credit and ordering its reversal with penalty and interest, as the entire amount covered by the show cause notice and the order was under the extended period of limitation, which was not justified. The appeal was allowed, and the appellant was advised to claim a refund in appropriate proceedings. The Tribunal expected that any application for refund filed by the appellant would be decided expeditiously and in accordance with law.