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2024 (2) TMI 1080 - AT - Central ExciseLevy of penalty under Rule 12(6) and Rule 27 of the Central Excise Rules, 2002 and Rule 15A of the Cenvat Credit Rules, 2004 - non-filing of returns namely ER-4, ER-5, ER-6 and ER-7 for the period from February 2012 to March 2016 - invocation of extended period of limitation as provided under Section 73, sub-section (4) of the Finance Act, 1994 - HELD THAT - As per Section 174(2)(e) of the CGST Act, 2017 the proceedings can only be continued under the new regime if it is arising/emerging out of investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings etc. Further, it is found that violation of non-filing of the returns under the existing law has not been saved under the present regime of GST. Further, in the present case the period involved is February 2012 to March 2016, whereas the show cause notice was issued on 23.04.2018 which is beyond the period of limitation. In fact, neither in the show cause notice nor in the impugned order, the grounds for invoking the extended period of limitation have been discussed. Nothing emerges from the impugned order that the appellant have not filed the requisite returns with intent to evade the payment of tax. Further, the decisions relied upon by the appellant as well as the respondent, are not strictly applicable in facts and circumstances of the present case. The imposition of penalties amounting to Rs.96,000/- is not sustainable - The impugned order is set aside - appeal allowed.
Issues involved:
The issues involved in the judgment are non-filing of returns under the Central Excise Rules, 2002, imposition of penalties, applicability of the extended period of limitation, and the impact of the introduction of the CGST Act, 2017 on ongoing proceedings. Non-filing of Returns and Imposition of Penalties: The appellant, engaged in the manufacture of 'Tin Containers,' failed to file returns namely ER-4, ER-5, ER-6, and ER-7 for the period from February 2012 to March 2016. Consequently, penalties amounting to Rs.96,000 were proposed and confirmed by the Adjudicating Authority. The Commissioner (Appeals) upheld the penalties, leading to the present appeal. Applicability of Extended Period of Limitation and CGST Act, 2017: The appellant argued that the penalties were imposed invoking the extended period of limitation without meeting the requirements under Section 73(4) of the Finance Act, 1994. They contended that the show cause notice issued after the introduction of the CGST Act, 2017 was without jurisdiction, as the saving clause under Section 174 of the CGST Act did not apply to the ongoing proceedings. The appellant also highlighted discrepancies in the penalty amount imposed compared to the statutory limit under Rule 27 of the Central Excise Rules, 2002. Judicial Analysis and Decision: Upon hearing both parties and reviewing the records, the Tribunal considered the provisions of Section 174(2)(e) of the CGST Act, 2017. The Tribunal noted that the saving clause allowed continuation of proceedings under the new regime only if they arose from previous investigations, inquiries, or legal proceedings. In this case, the show cause notice issued in 2018 for non-filing of returns from 2012 to 2016 exceeded the period of limitation without valid grounds for invoking the extended period. The Tribunal found that the penalties imposed were unsustainable and set aside the impugned order, allowing the appeal of the appellant. Conclusion: The Tribunal concluded that the imposition of penalties amounting to Rs.96,000 was not justified due to procedural irregularities and lack of valid grounds for invoking the extended period of limitation. Therefore, the impugned order was set aside in favor of the appellant. Separate Judgment: No separate judgment was delivered by the judges in this case.
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