2024 (6) TMI 85 - AT - Central Excise

Invocation of Extended period of limitation - recovery of CENVAT Credit with interest and penalty - Rent a Cab Service - HELD THAT - There are no specific reason recorded in the show cause notice or the Order-in-Original or the impugned order on the basis of which it can be said that the Appellant has suppressed any facts from the Revenue with intention to evade payment of service taxes. Invocation of extended period of limitation as per Section 11A(4) for making this demand could not have been sustained in view of COMMISSIONER VERSUS MEGHMANI DYES INTERMEDIATES LTD. 2013 (6) TMI 141 - GUJARAT HIGH COURT and M/S LG ELECTRONICS INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, (NOIDA) 2024 (4) TMI 533 - CESTAT ALLAHABAD where it was held that 'Where merely a procedural violation in respect of complying with a condition of Notification cannot be said to be an act of suppression for invoking extended period of limitation. No justification for invoking extended period of limitation is forthcoming from the show cause notice, order in original or the impugned order.' The demand is barred by limitation - the impugned order is set aside - appeal allowed.

Summary

Issues involved: Appeal against Order-in-Appeal No.108/CE/ALLD/2021 dated 17.03.2021 passed by Commissioner (Appeals) CGST & Central Excise, Allahabad regarding the demand of CENVAT credit beyond the normal period of limitation, interest, and penalty.

Issue 1: Demand beyond the normal period of limitation

The Commissioner (Appeals) upheld the demand of CENVAT credit of Rs.48,253/- along with interest and penalty under Rule 15 of the Credit Rules, citing the appellant's wrongful availment and utilization of CENVAT credit, suppression of facts, and failure to rectify the issue even after being notified. The appellant's reliance on a Supreme Court judgment was deemed inapplicable as the demand was found to be sustainable.

Issue 2: Admissibility of CENVAT credit on Rent a Cab Service

During an audit, it was discovered that the Appellant had taken CENVAT credit on Rent a Cab Service amounting to Rs.48,253/-, which was deemed inadmissible. The show cause notice issued to the Appellant included demands for recovery of the credit, imposition of penalty, and recovery of interest. The Order-in-Original confirmed the demand, penalty, and interest, except for a portion already paid by the Appellant.

Issue 3: Invocation of extended period of limitation

The show cause notice invoked the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944, alleging suppression of material facts by the Appellant regarding the CENVAT credit on rent-a-cab service. However, the Appellant argued that there was no evidence of intentional suppression of facts to evade payment of service taxes, citing relevant legal precedents where demands were held to be barred by limitation.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal on the grounds that the demand was barred by limitation. The decision was based on the lack of specific reasons recorded for invoking the extended period of limitation and the absence of evidence showing intentional suppression of facts by the Appellant.