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TMI Blog2016 (11) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... originally enacted because suppression of fact, willful misstatement et al cannot be ruled out in discharge of duty/tax liability. That, in the present context, would entail application of that provision to the utilization of CENVAT credit towards discharge of tax liability which is not in dispute here. The applicability of section 73 to rule 14 of CENVAT Credit Rules, 2004 is qualified by the expression ‘mutatis mutandis’ besides admitting to two mutually exclusive possibilities. In the context, it is more pertinent to note that suppression of fact is not the mirror image of lack of awareness by the tax authorities for, if that were to be so, the statutory provision of section 73 of Finance Act, 1994 relating to the normal period of limitation would be redundant as would the dichotomy specified in rule 14 of CENVAT Credit Rules, 2004. The appeal of assessee is allowed to the extent of setting aside the demands that, despite being barred by limitation, were held to have been due for discharge by default - appeal of Revenue rejected. - APPEAL NOS: ST/227 & 597/2011 - Order No. A/93114-9315/16/STB and M/93116/16/STB - Dated:- 6-10-2016 - Shri M V Ravindran, Member (Judicial) An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax incurred as recipient of rent-a-cab service, the credit availed against documents that, though fewer than the numbers cited in the two notices, could not be produced, the credit availed on purchases of goods as proposed in both notices, the excess amount of credit availed during the earlier period alone for cess paid, the credit of tax on premiums of some of the insurance policies. The amounts confirmed as recoverable owing to short-payment on output services was scaled down and confirmed for the earlier period. While thus disallowing some of the credits, it was also held that the extended period of limitation could not be invoked for the earlier period; nevertheless, the amounts confirmed, totaling ₹ 66,91,644, were held to have been paid as self-assessed as per section 73(3) of Finance Act, 1994. For the later period, the amount confirmed was ₹ 11760. Interest on confirmed amount was held as recoverable. Penalty provisions were not invoked. 4. There are, primarily, thirteen different contraventions that have been listed in the show cause notice for the earlier period with the later notice limited to eight of these. The impugned order which has deemed the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set of facts peculiar to the case in dispute. In the grounds of appeal, Revenue contends that the Commissioner erred in not considering the narrow scope of audit, limited by the audit plan, and that the decisions in HCL Technologies Ltd v. Commissioner of Central Excise Noida [2010 (254) ELT 175 (Tri-Del)], Chemfab Alkalis Ltd v Commissioner of Central Excise, Pondicherry [2010 (251) ELT 264 (Tri-Chennai)] and Sudhir Gensets Ltd v. Commissioner of Central Excise, Vapi [2010 (255) ELT 295 (Tri-Ahmd)] which approved the invoking of extended period should have guided the Commissioner. In essence, the claim is that the service tax authorities could not be presumed to be aware of every aspect of the functioning of the assessee. Learned Special Counsel appearing for Revenue also highlighted these decisions. We are not inclined to consider the decision in re HCL Technologies Ltd to be a binding precedent as it disposed off a stay application and is naught but a preliminary view. In re Chemfab Alkalis Ltd, it was held that 5. After hearing both sides and perusal of the records and the cited case law, I find that in the case of Hindustan Coca Cola (supra) the following observation ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken in an interim order such as a stay order, cannot be taken as a binding precedent. Moreover, it was not only the visit of the audit party but also the presence of other additional factors in the case of Hindustan Coca Cola (supra) which appear to have persuaded the Tribunal Bench to take a particular prima facie view in the said case. The present case is different where such attendant additional factors are not present. Besides, it is well known that the department has a regular programme of audit, under which different units are audited according to the frequency laid down, for example, a bigger unit having more transactions and paying more revenue is audited more frequently, say, once in 6 months. It cannot be a case of anybody that since all the excisable units are being audited by the department from time to time, the extended period of limitation will not apply in respect of any unit. Such an interpretation would render the relevant legal provision regarding application of extended period of time totally redundant and hence cannot be accepted. 8 . In re Sudhir Genets Ltd, it was observed that According to proviso to Section 11A, the department is required to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nized as part of the audit plan. There is also no allegation that returns were deficient or that these were not being filed regularly. If such magnitude of credit availment was not sufficient to excite the interest of tax auditors, then the scheme of audit needs to be revisited or the audit management concerned should be subject to inquiry for unreasonable disregard of revenue consideration. 11. It is amply clear from the grounds of appeal that the denial of CENVAT credit is sought on the basis of interpretation of definitions in the CENVAT Credit Rules, 2004. The statutory provisions in section 73 of Finance Act, 1994 are amply clear in permitting the extension of period of limitation only in the event of fraud, collusion, willful misstatement, suppression of facts, or any other contravention with intent to evade tax. Interpretational disputes and these specifically enumerated situations are mutually exclusive. 12. Section 73 of Finance Act, 1994 is the clone of section 11A of Central Excise Act, 1944. The scheme for invoking the extended period initially considered that empowerment to be of sufficient import as to warrant the specific application of mind by the Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice are barred for confirmation and recovery. 14. Having arrived at that finding, we now examine the correctness of the action of the adjudicating Commissioner in holding that the amounts of ₹ 14,38,434/- disallowed for failure to furnish documents, ₹ 5,49,280/- on account of services that do not have a nexus with the output, the short-fall in tax payment of ₹ 1,29,181/- through debit of CENVAT credit account, ₹ 39,61,434 on account of insurance premiums, and excess availment of ₹ 613315 of cess paid were deemed to have been discharged voluntarily and hence vested with the public exchequer even if barred for recovery. Any amount paid before such dues were held to be barred for recovery is, naturally, retainable as tax; it is not that tax was not leviable but that the mechanism for collection of that levy is incapacitated beyond the normal period of limitation. Conversely, such amounts do not have to be subject to recovery or appropriation in statutory proceedings. That the adjudicating Commissioner has done so implies that the wherewithal by which the recovery was made before it was held to be barred is not available on records. These amounts would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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