2017 (11) TMI 213 - AT - Service Tax

Demand of CENVAT credit wrongly availed with interest - extended period of limitation - suppression of facts - case of appellant is that they are Public Sector Undertaking and suppression cannot be alleged against the Public Sector Undertaking - Held that - as far as suppression is concerned, the Commissioner (Appeals) has categorically held that there is no suppression in this case and therefore he has given the benefit of Section 80 of the Finance Act to the appellant and it is also a fact that the appellant is a PSU and suppression cannot be alleged against a PSU - once suppression cannot be alleged then extended period of limitation cannot be invoked - demand being time barred is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand of cenvat credit, liability to pay interest, penalty under Section 77 and 78, suppression of facts, extended period of limitation, applicability to Public Sector Undertaking (PSU).

Analysis:
The appeal was against an order confirming the demand of cenvat credit, interest, and dropping the penalty under Section 77 and 78, considering the appellant as a PSU where suppression couldn't be alleged. The facts revealed that excess cenvat credit was taken and utilized for service tax payment, leading to a show-cause notice demanding the irregularly availed credit, interest, and penalty. The appellant contested, seeking personal hearing, but the lower authority upheld the demand and penalty. The Commissioner upheld the demand and interest but dropped the penalty, prompting the current appeal.

The appellant argued that the order lacked legal basis, citing the limitation period exceeding the normal timeframe, emphasizing no suppression of facts by the appellant, especially as a PSU. The Commissioner's order highlighted the PSU status, negating suppression allegations, yet didn't address the extended limitation invocation due to alleged suppression. Legal precedents were cited supporting the appellant's stance, including cases against extended limitation imposition on PSUs.

The opposing party reiterated the impugned order's findings. The Tribunal analyzed the case, noting the demand period and the delayed show-cause notice invoking extended limitation due to alleged suppression. Considering the absence of suppression, the Commissioner's benefit under Section 80 of the Finance Act to the appellant, and the PSU status negating suppression allegations, the Tribunal ruled in favor of the appellant. Citing legal precedents, the Tribunal held the demand as time-barred, setting it aside and allowing the appeal.

In conclusion, the Tribunal ruled in favor of the appellant, deeming the demand time-barred due to the absence of suppression allegations against a PSU, as supported by legal precedents. The judgment highlighted the importance of factual appreciation and legal position in such cases, ensuring fair treatment based on established laws and precedents.