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2024 (9) TMI 1083 - AT - Service TaxTime limitation - suppression of facts or not - eligibility for CENVAT Credit on input services while also claiming abatement under Notification No. 01/2006-ST - HELD THAT - Once when the ST-3 returns were filed regularly, the Department cannot allege fraud, collusion, wilful mis statement or suppression of facts, and invoke the extended period of time. In the instant case, the Appellant has regularly filed ST-3 returns consequent upon obtaining Service tax registration. the original authority has failed to give a finding to the effect that considering the facts and circumstances of this case, how extended period is invocable. The impugned order notes that the extended period is invokable as the availment of Cenvat Credit came to the knowledge of the officers during the audit of the records of the appellant. There has been no evidence led by the Department of any positive act of suppression or fraud by the appellant. In this case the Appellant has filed returns regularly and disclosed all information to the department - the extended period of limitation is not invocable in this case. The CESTAT Delhi in M/S INTERNATIONAL AIR CHARTER VERSUS COMMISSIONER OF CENTRAL TAX (APPEALS II) , DELHI 2023 (12) TMI 1004 - CESTAT NEW DELHI , allowed the appeal of the assessee on limitation, finding that mere suppression of facts, as alleged by the department, is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty. 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 entire demand in the instant case is for the extended period - the show cause notice dated 23.04.2016 is barred by time, as extended period is not invokable in the facts and circumstances of the present appeal. The impugned order is set aside and the appeal is allowed.
Issues Involved:
1. Whether the demand for CENVAT Credit availed by the appellant is time-barred. 2. Whether the appellant was entitled to avail CENVAT Credit on input services while also claiming abatement under Notification No. 01/2006-ST. 3. Whether the penalties imposed under Sections 77 and 78 of the Finance Act, 1994, are justified. Detailed Analysis: 1. Time-Barred Demand: The appellant argued that the demand is time-barred as the Show Cause Notice (SCN) was issued on 23.04.2016 for the period 2010-11 to 2012-13 (up to June 2012). The appellant had been filing returns regularly, hence the invocation of the extended period does not arise. The Tribunal noted that the appellant had filed ST-3 returns regularly, and the department cannot allege fraud, collusion, willful misstatement, or suppression of facts to invoke the extended period of time. The Tribunal referred to the case of GD Goenka Private Limited Versus Commissioner CGST Delhi South, which held that extended period of limitation cannot be invoked unless there is evidence of fraud or willful suppression of facts. The Tribunal concluded that the extended period of limitation is not invocable in this case, making the SCN time-barred. 2. Entitlement to Avail CENVAT Credit: The appellant contended that they paid service tax on construction services in cash and did not avail credit of input construction services. They availed CENVAT Credit for non-construction input services utilized for other output services like maintenance and repair, administrative charges, etc. The appellant argued that the availment of credit was restricted only on Construction of Complex service under Notification No. 01/2006-ST, and there was no restriction on availing credit under other categories of services. The department, however, argued that abatement in respect of construction services and simultaneous CENVAT Credit is not permissible. The Tribunal did not delve into the merits of this issue as the demand was already held to be time-barred. 3. Justification of Penalties: The appellant argued that since the demand of service tax is not sustainable, the demand for interest and imposition of penalties under Sections 77 and 78 of the Finance Act, 1994, is also not justified. The department maintained that penalties were justified due to suppression of facts with intent to evade service tax. The Tribunal, having found the demand time-barred, did not address the merits of the penalties. Conclusion: The Tribunal held that the SCN dated 23.04.2016 is barred by time as the extended period of limitation is not invocable. Consequently, the Tribunal did not examine the merits of the case regarding the entitlement to avail CENVAT Credit and the justification of penalties. The impugned order was set aside, and the appeal was allowed. Order Pronounced: (Order pronounced in the open Court on 19.09.2024)
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