9911796707
Advanced Search 
TMI Blog2014 (4) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... ld storage was an essential part of the clearing and forwarding operations of the assessee, cold storage charges are required to be added in the taxable value of services rendered. Consequently, two appeals have been filed. In the appeal filed by the Revenue, the finding of the Tribunal that the extended period of limitation could not have been invoked is called in question. On the other hand, in the appeal filed by the assessee, it has been urged that once the Tribunal had held that the demand was barred by time, there was no occasion for the Tribunal to enter into the merits and, hence, that part of the reasoning of the Tribunal which deals with the merits of the dispute would have to be set aside. For convenience of reference, we will take up the appeal by the Revenue first before dealing with the appeal by the assessee. Central Excise Appeal No.370 of 2014 The Revenue has formulated the following question of law in assailing the order of the Tribunal :- "Whether in the facts and circumstances of the case, the Tribunal is correct in holding that the show cause notice issued in the present case is barred by limitation." A notice to show cause was issued to the assessee on 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, the Revenue filed an appeal in order to question the reduction in the penalties which were imposed by the Assessing Officer. The Tribunal held that the extended period of limitation could not be invoked by the Revenue since the condition precedent under Section 73(1) of the Finance Act had not been fulfilled. The relevant part of the reasoning of the Tribunal is as follows:- "13. Coming to issue of limitation, we find that for the first time the Revenue wrote a letter dated 27.9.2002 asking asessee to pay tax for the period September 2001 to July 2002. Assessee replied this letter vide their letter dated 8.11.2002. Thereafter there was correspondence on 20.11.2002 from the department and replied by assessee on 9.12.2002. We find that fact that assessee is not paying duty on cold storage was known to department in 2002. Quantum of cold storage charges is already part of agreement and is fixed on monthly basis. We are therefore of the view that extended period based on suppression of fact cannot be invoked in the present case and therefore demand beyond period of one year is time-barred in the present case. Decisions relied on by ld. D.R. do not support the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e use of the cold storage facility. On these facts, it is clear that the fact that the assessee was not paying service tax on the fixed monthly charges was known to the Department on 27 September 2002. The Department evidently had knowledge of the agreement between the assessee and HLL under which the payment of cold storage charges on a fixed monthly basis was part of the agreement. In this view of the matter, the Tribunal, in our view, was justified in coming to the conclusion that the extended period of limitation could not be invoked since there was no suppression of facts on the part of the assessee. Section 73 of the Finance Act, 1994 provides a period of one year for service of notice where service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded. The extended period of limitation of five years applies where service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or of the Rules with intent to evade payment of service tax. The law on the subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eiterated by this Court in Collector of Central Excise, Baroda, v. LMP Precision Engg. Co. Ltd. 2004 (9) SCC 703." This view has been followed by the Supreme Court in Uniworth Textiles Ltd. Vs. Commissioner of Central Excise, Raipur4 wherein it has been held as follows:- "12. ................. We are not convinced by the reasoning of the Tribunal. The conclusion that mere non-payment of duties is equivalent to collusion or willful misstatement or suppression of facts is, in our opinion, untenable. If that were to be true, we fail to understand which form of non-payment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or willful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the Appellant as fit for the applicability of the proviso." Moreover, the Supreme Court has held that the burd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant date. For the reasons that we have already indicated above, we come to the conclusion that the extended period of limitation was not warranted. Thus, in so far as the appeal of the Revenue is concerned, no substantial question of law would arise for consideration. The appeal by the Revenue is dismissed. Central Excise Appeal Defective No. - 33 of 2014 We have granted leave to the assessee to amend the questions of law. Though in the appeal by the assessee several questions of law have been framed, the following question has been pressed at the hearing : - "Whether the Tribunal having held that proceedings were barred by limitation and proceedings were liable to be quashed on the ground of limitation, the Tribunal committed an illegality in deciding the question on merits. Hence is the finding of Tribunal on merits liable to be set aside.?" The appeal is admitted on the following question of law and is by consent taken up for final hearing. The Tribunal came to the conclusion that the demand by the Revenue was beyond the period of limitation of one year prescribed under Section 73(1) of the Finance Act, 1994 and that the period of five years could not have been invo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
