2016 (8) TMI 632 - AT - Service Tax

Invokation of extended period of limitation - period involved is April 2009 to September 2010 and SCN issued on 12.3.2014 - Service tax credit - service tax paid on transit insurance premium w.r.t. transport of goods from the factory gate to the buyer s premises - credits were reflected in all their records and statutory returns filed with the Department and was found to be ineligible upon scrutiny by the officers of audit - Held that - the allegation of fraud, suppression, willful misstatement with intend to evade payment of duty has to have some positive act on the part of the appellant to sustain the same. Para 4 of the show cause notice made allegation to this effect without any elaboration of evidence or basis. The Tribunal in CCE, Jaipur - I vs. Pushp Enterprises 2010 (11) TMI 835 - CESTAT, NEW DELHI held to the effect that when the ER-1 returns containing the details credit were filed regularly extended period demand cannot be raised later in case it was found that certain credits are not eligible to the assessee. Therefore, by considering the same, the impugned order cannot be sustained on the questions of time bar. - Decided in favour of appellant

Summary

Issues: Eligibility of service tax credit on transit insurance premium; Time bar for raising demand

The judgment dealt with the issue of the eligibility of the appellant for service tax credit concerning the service tax paid on transit insurance premium for the transport of goods from the factory gate to the buyer's premises. The appellant argued that the transit insurance was essential for the safety of the goods and was part of their business expenditure, making it eligible for credit. The appellant contended that the demand was time-barred as the notice was issued after a significant period from the time the credits were availed. The appellant maintained that there was no suppression of facts as the credits were duly recorded in their statutory returns filed with the Department. The appellant relied on previous cases to support the argument that detection by routine audit cannot lead to invoking the extended period for demanding payment.

The Authorized Representative (AR) supported the findings of the lower authorities, asserting that the service tax on transit insurance did not fall under the category of "input services" as they related to the clearance of goods beyond the place of removal. Upon hearing both sides and examining the records, the Tribunal found that the credits in question were availed by the appellant during a specific period and were duly reflected in all relevant records and statutory returns. The Tribunal highlighted that for allegations of fraud, suppression, or willful misstatement to be sustained, there must be a positive act on the part of the appellant. The Tribunal referenced a previous case to emphasize that when details of credits were regularly filed in statutory returns, an extended period demand could not be raised later if certain credits were deemed ineligible.

In conclusion, the Tribunal held that the impugned order could not be upheld concerning the time bar issue. Therefore, the order was set aside, and the appeal was allowed. The judgment emphasized the importance of regular filing of statutory returns and the lack of evidence supporting allegations of fraud or suppression in sustaining demands beyond the normal period.