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2024 (1) TMI 1397 - AT - Service TaxDisallowance of CENVAT Credit - recovery alongwith penalties invoking Extended period of limitation - HELD THAT - It would be seen from the judgment of the Supreme Court in COLLECTOR OF CENTRAL EXCISE VERSUS H.M.M. LIMITED 1995 (1) TMI 70 - SUPREME COURT that in order to attract the proviso to section 11A of Central Excises and Salt Act 1944 which is pari materia to section 73 (1) of the Finance Act it must be alleged in the show cause notice that the duty of excise had not been paid by reason of fraud collusion or willful mis-statement or suppression of facts on the part of the assessee with intent to evade payment of duty and if there is no averment that duty of excise had been intentionally evaded or that fraud or collusion had been noticed it would not be possible to sustain the notice seeking to invoke the extended period of limitation. The facts of the present case are also almost identical. Here also the show cause notice merely refers to the proviso to section 73(1) of the Finance Act and fails to make reference to any specific ingredient of the proviso. In view of the aforesaid decisions of the Supreme Court it would not be possible to sustain the order passed by the Commissioner confirming the demand by invoking the extended period of limitation under the proviso to section 73(1) of the Finance Act - the impugned order dated 08.06.2017 passed by the Commissioner is accordingly set aside - appeal allowed.
Issues:
Invocation of extended period of limitation under proviso to section 73(1) of the Finance Act 1994 based on CENVAT credit disallowance. Analysis: The judgment revolves around the disallowance of CENVAT credit by the Commissioner, leading to the invocation of the extended period of limitation under the proviso to section 73(1) of the Finance Act 1994. The appellant, Air India Ltd., challenged the order dated 08.06.2017, arguing that the extended period of limitation was wrongly invoked without specific allegations of evasion of service tax payment. The appellant contended that the show cause notice lacked essential details to justify the extended period. The Commissioner, however, defended the order, asserting no illegality in confirming the extended period of limitation. Upon scrutiny, the show cause notice highlighted discrepancies in the CENVAT credit availed by the appellant, emphasizing the absence of supporting documents and alleged wrongful availment of credit. The notice indicated potential recovery under rule 14 of the CENVAT Credit Rules, 2004, and section 73(1) of the Finance Act. The appellant's counsel argued that the notice failed to specify the necessary elements for invoking the extended period, as per relevant judicial precedents. The judgment referred to Supreme Court decisions, such as H.M.M. Ltd., Raj Bahadur Narain Singh Sugar Mills Ltd., and Kaur & Singh, emphasizing the need for specific allegations of fraud, collusion, or willful misstatement to justify extending the limitation period. It underscored that the absence of such averments in the show cause notice renders the invocation of the extended period legally unsustainable. The court concurred with the appellant's argument, citing the lack of essential details in the show cause notice to support the extended limitation period. Consequently, the court set aside the Commissioner's order dated 08.06.2017, allowing the appeal by Air India Ltd. The judgment serves as a reminder of the importance of precise allegations and legal requirements when invoking extended periods of limitation in tax matters, emphasizing compliance with established legal principles and precedents.
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