2019 (5) TMI 1289 - AT - Service Tax

CENVAT Credit - duty paying documents - credit availed on the basis of manufacturer s invoices - extended period of limitation - suppression of facts - HELD THAT - A perusal of the Show Cause Notice dated 19.10.2016 reveals that even though the same refers to the appellant s reply dated 05.12.2013 wherein the details of the credit taken by the appellant were submitted, the only lacuna pointed out is the non-production of original documents. Undisputedly, the appellant did not import ATM machines and consequently, there was no Customs Duty liability on the appellant. A perusal of the reply also makes it very clear that based on the original invoices only the CENVAT Credit was availed, which were maintained at various branches and the Head Office had only obtained the photocopies of the invoices for the sake of convenience. Extended period of limitation - HELD THAT - The same has been acknowledged by the audit party of the Department and apparently, there is no action by the Revenue till 19.10.2016, which is the date of the Show Cause Notice, which is clearly beyond the perceivable period of limitation. The purchase took place in the year 2011. The Internal Audit enquired about it, issued questionnaire (in 2013) and got replies thereafter. If anything was wrong, then nothing prevented the Revenue from issuing soon thereafter, after entertaining a doubt, from issuing Show Cause Notice. From 2013 to 2016, hands changed and mind also, hence, it is clearly a case of change of opinion, which is covered by the above decision. The stand of the Revenue as to suppression is, therefore, only on imaginations, which is not supported by any documentary evidence. The Revenue has miserably failed to justify invoking larger period of limitation - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Availment of CENVAT Credit on capital goods.
2. Show Cause Notice for demand of Service Tax, interest, and penalty.
3. Dispute regarding suppression, fraud, and limitation period.
4. Arguments by the Consultant for the Appellant and Authorized Representative for the Respondent.
5. Analysis of facts and legal precedents.
6. Decision on the appeal and consequential benefits.

Availment of CENVAT Credit on capital goods:
The appellant, a holder of Service Tax Registration providing taxable services under 'Banking and Other Financial Services,' availed CENVAT Credit on capital goods, specifically ATM machines, leading to a demand for reversal of credit. The Department noticed discrepancies in the credit availed based on photocopies of invoices, culminating in the issuance of a Show Cause Notice demanding Service Tax, interest, and penalty.

Show Cause Notice and Dispute:
The Show Cause Notice dated 19.10.2016 proposed a significant demand, prompting the appellant to dispute the allegations. The Order-in-Original confirmed a partial demand reversal but allowed credit availed based on original invoices. The appellant contended that all relevant information regarding the ATM machines purchase was provided to the Revenue, emphasizing the Department's awareness of the transactions, thus challenging the invocation of a larger limitation period.

Suppression, Fraud, and Limitation Period:
The Consultant for the Appellant argued that the Revenue failed to justify the extended limitation period, citing a change of opinion and lack of documentary evidence supporting allegations of suppression. The Tribunal's analysis highlighted the Department's knowledge of the transactions since 2013, rendering the invocation of a larger limitation period unjustified.

Arguments and Analysis:
The Consultant for the Appellant and Authorized Representative for the Revenue presented their arguments, with the latter supporting the findings in the impugned order. The Tribunal analyzed the facts, emphasizing the lack of Customs Duty liability due to no import of ATM machines and the appellant's compliance with availing CENVAT Credit based on original invoices.

Legal Precedents and Decision:
The Tribunal referenced a decision by the Hon'ble High Court of Allahabad, emphasizing the importance of fulfilling conditions precedent for invoking an extended limitation period. Drawing parallels with the cited case, the Tribunal concluded that the Revenue's failure to justify the larger limitation period rendered the impugned order unsustainable, leading to the allowance of the appeal with consequential benefits as per law.

This detailed analysis of the judgment addresses the issues involved comprehensively, covering the factual background, legal arguments, precedents cited, and the final decision on the appeal.