2016 (10) TMI 798 - AT - Service Tax

Extended period of limitation - the demand issued prior to October 2000 being period more than 5 years, barred by limitation - whether the appellant is justified in holding that in the absence of any suppression of facts, the extended period of limitation cannot be invoked in the present case even for the period after October 2000? - Held that - I am of the view that the case needs to be remanded to the Ld. Commissioner (Appeals) to record reasons as to how the extended period of limitation would be applicable to the demand for the period after October 2000. In the result, the impugned order is set aside and the appeal is remanded to the Commissioner (Appeals) to address all the issues including applicability of extended period of limitation. Needless to mention that a reasonable opportunity of hearing be allowed to the appellant - matter remanded.

Summary

Issues:
1. Application of extended period of limitation for demand beyond 5 years.
2. Compliance with Section 35F of Central Excise Act, 1944.
3. Remand of the case to the Commissioner (Appeals) for further consideration.

Analysis:
Issue 1: The appeal was filed against an order confirming a demand notice for recovery of allegedly short-paid Service Tax for the period 1999-2000 to 2003-2004. The appellant contended that the demand was barred by limitation for the entire period. The Commissioner (Appeals) held that the demand issued prior to October 2000, being more than 5 years, was indeed barred by limitation. However, the appellant argued that the extended period of limitation could not be invoked even for the period after October 2000 due to the absence of suppression of facts. The Authorized Representative for the Revenue agreed that the Commissioner (Appeals) did not provide reasons for applying the extended period of limitation and had no objection to remanding the case for further consideration.

Issue 2: The appellant's appeal was rejected by the Commissioner (Appeals) for non-compliance with the provisions of Section 35F of the Central Excise Act, 1944. The Tribunal directed the appellant to deposit a certain amount and participate in the de-novo proceeding before the Commissioner (Appeals). The matter was remanded to the Adjudicating Authority by the Commissioner (Appeals) with an observation that the Show Cause Notice could not be issued beyond 5 years, leading to the appellant's appeal before the Tribunal.

Issue 3: The Tribunal set aside the impugned order and remanded the appeal to the Commissioner (Appeals) to address all issues, including the applicability of the extended period of limitation. The Tribunal emphasized the need for the Commissioner (Appeals) to record reasons for how the extended period of limitation would apply to the demand for the period after October 2000. The appellant was to be given a reasonable opportunity of hearing, and all issues were to be kept open, allowing the appeal by way of remand.

In conclusion, the judgment focused on the application of the extended period of limitation, compliance with statutory provisions, and the remand of the case for further consideration by the Commissioner (Appeals) to address all issues comprehensively, ensuring a fair opportunity for the appellant to present their case.