2016 (10) TMI 239 - AT - Service Tax

Cenvat Credit - credit on construction service - discrepancy in duty paying documents - extended period of limitation - Held that - In the show cause notice it is not alleged that the assessee has taken credit with malafide intention. Moreover, the credit has been taken by the assessee after intimating to the department that the assessee is going to take credit on construction service. Earlier it has not been objected to. In that circumstance, the extended period of limitation is not invokable - Credit allowed - Decided in favor of assessee.

Summary

Issues:
Credit denial on construction services for 2006-07, imposition of penalty, invocation of extended period of limitation, intention to avail inadmissible credit, appeal by assessee against demand confirmation, appeal by Revenue against penalty dropping.

Analysis:
The case involved a dispute regarding the denial of credit on construction services for the year 2006-07 and the imposition of a penalty on the assessee. The Revenue alleged that the documents used by the assessee to claim credit were not proper. A show cause notice was issued to the assessee, leading to the denial of credit and the imposition of a penalty. The Commissioner (Appeals) found that there was no intention by the assessee to avail inadmissible credit, hence no penalty was imposed. The assessee appealed against the denial of credit, while the Revenue appealed against the dropping of the penalty.

Upon hearing both sides, it was noted that the show cause notice invoked an extended period of limitation, but did not allege malafide intention on the part of the assessee in claiming credit. The assessee had informed the department before claiming the credit, and it had not been objected to previously. Therefore, the extended period of limitation was deemed inapplicable, and the credit could not be denied to the assessee. Additionally, it was found that the assessee was entitled to the credit based on the documents presented. Consequently, the appeal by the assessee was allowed, leading to the dismissal of the Revenue's appeal as the assessee succeeded.

In conclusion, the Appellate Tribunal ruled in favor of the assessee, allowing the appeal against the denial of credit on construction services for 2006-07. The Tribunal also dismissed the Revenue's appeal against the dropping of the penalty, emphasizing that the assessee had not acted with malafide intention and was entitled to the credit based on the documents provided.