2018 (9) TMI 565 - AT - Central Excise

Extended period of limitation - CENVAT Credit - service tax paid on the services used for outwards transportation of the appellant s final product from their factory gate to the customer s premises - penalty - Held that - Apart from that the said credit has been availed by reflecting the same in the statutory document in which case again no mala fide can be attributed to the assessee so as to justifiably invoke the longer period of limitation - the major part of the demand is barred by limitation and the Original Adjudicating Authority is within his rights to re-quantify the demand falling within limitation period, which would be payable by the appellant. There was no mala fide on the part of the assessee, imposition of penalty upon them is not justified - Penalty set aside. Appeal disposed off.

Summary

Issues Involved:
Admissibility of Cenvat credit on service tax for outwards transportation; Invocation of extended period of limitation; Imposition of penalty.

Admissibility of Cenvat credit on service tax for outwards transportation:
The issue in the present appeal pertains to the admissibility of Cenvat credit of service tax paid on services used for transporting the final product from the factory gate to the customer's premises. The Commissioner (Appeals) relied on a Supreme Court decision and held that such credit is not admissible. The appellant acknowledged the Supreme Court decision but contended that the court did not consider certain aspects. However, the Tribunal found no fault with the Supreme Court's decision and upheld the rejection of the Cenvat credit.

Invocation of extended period of limitation:
The demands against the appellant were raised invoking the longer period of limitation due to a show cause notice issued for a specific period. The Commissioner (Appeals) upheld the extension, stating that the appellant failed to follow proper procedures, leading to a suppression of facts. However, the Tribunal found the Commissioner's observation to be mechanical and without proper consideration. It noted that previous Tribunal decisions allowed such credit, and since the Supreme Court's decision in the case of Ultra-tech Cement Ltd., the demand for the extended period was deemed unjustified. The Tribunal held that a major part of the demand was time-barred, and only the amount falling within the limitation period was payable by the appellant.

Imposition of penalty:
Given the absence of mala fide intentions on the part of the assessee, the Tribunal deemed the imposition of a penalty unjustified. Consequently, the penalty imposed on the appellant was set aside. The Tribunal disposed of the appeal accordingly, emphasizing the absence of mala fide conduct and the unjustified nature of the penalty.