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TMI Blog2024 (11) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... n earlier decision of M/s EMAAR MGF Land Ltd. [ 2023 (2) TMI 613 - DELHI HIGH COURT] concurred with the learned CESTAT that the extended period of limitation was not correctly invoked as the intent to evade tax was neither established nor evident in the given facts. No infirmity with the decision of the learned CESTAT in rejecting the Revenue s contention that it was entitled to invoke the extended period of limitation in terms of the proviso to Section 73 (1) of the Act. - HON'BLE MR. JUSTICE VIBHU BAKHRU AND HON'BLE MS. JUSTICE SWARANA KANTA SHARMA For the Appellant Through: Mr Akshay Amritanshu, SSC, Mr Samyak Jain, Ms Swati Mishra, Ms Drishit Saraf and Ms Pragya Upadhyay, Advocates. For the Respondent Through: Mr Yogendra Aldak, Mr Kunal Kapoor, and Mr Sumit Khadaria, Advocates. VIBHU BAKHRU, J. (ORAL) CM APPL. 52737/2024 (condonation of delay of 37days in filing) 1. For the reasons stated in the application, the delay of thirty-seven days in filing the appeal stands condoned. 2. The application stands disposed of. SERTA 18/2024 3. The Revenue has filed the present appeal under Section 35G of the Central Excise Act, 1944 as applicable to the Finance Act, 1994 (hereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble from them. *** *** 10. Whereas the assessee has failed to produce the supporting documents before the CERA audit team, and this office in spite of this office letters dated 02.05.2011, 01.03.2012, 29.05.2012 and 17.08.2012. Thus, it appears that the assessee availed the cenvat credit on input service without fulfilling the conditions prescribed in this regard under Rule 9 of the CCR, 2004 ibid. This fact would not have come to the notice of the Department if the audit of the assessee had not been conducted. Therefore, provision of proviso to Section 73 (1) of the Act ibid can be invoked against the assessee, and demand recovery can be made for wrong availment of CENVAT Credit for the extended period of five years from the relevant date. 7. Thereafter, pursuant to the said SCN, the Commissioner of Service Tax passed an Order-in-Original dated 08.06.2017, directing the recovery of CENVAT credit amount of Rs. 10,75,77,445/- (Rupees Ten Crores Seventy Five Lacs Seventy Seven thousands Four hundred and Forty Five only) under Rule 14 of the CENVAT Rules read with Section 73 of the Act. In addition, the Commissioner of Service Tax also imposed the penalty of an equal amount of Rs. 10, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue, assesses case falls in the exception where tax has been short levied on account of suppression of facts . 13. The learned CESTAT did not accept the Revenue s contention and noted that it was the case where the allegation against the assessee is merely that it had not produced the documents to substantiate its claim during the course of audit and, therefore, the extended period of limitation in terms of the proviso to Section 73 (1) of the Act would not be applicable. 14. In addition, the learned CESTAT also noted that the SCN did not make any such allegation to the effect that the respondent had supressed any material fact. The learned CESTAT referred to the decision of the Supreme Court in Collector of Central Excise v. H.M.M. Limited: 1995 (76) ELT 497 (SC) and noted the following passage:- 2. ........... Now in order to attract the proviso it must be shown that the excise duty escaped payment by reason of fraud, collusion or wilful mis-statement or suppression of fact or contravention of any provision of the Act or of the Rules made thereunder with intent to evade payment of duty. In that case the period of six months would stand extended to 5 years as provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the excise department places reliance on the proviso it must be specifically stated in the show cause notice which is the allegation against the assessee falling within the four corners of the said proviso. In the instant case that having not been specifically stated the Additional Collector was not justified in inferring (merely because the assessee had failed to make a declaration in regard to waste or by-product) an intention to evade the payment of duty. The Additional Collector did not specifically deal with this contention of the assessee but merely drew the inference that since the classification list did not make any mention in regard to this waste product it could be inferred that the assessee had apparently tried to evade the payment of excise duty. 15. On the strength of the said decision, the learned CESTAT held that the SCN must allege that the amount of tax has not been paid for the reasons of fraud, collusion or wilful mis-statement or suppression of facts to sustain a notice beyond the period as prescribed under Section 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. 19. In Anand Nishikawa Co. Ltd. v. CCE (2005) 7 SCC 749 the Supreme Court referred to its earlier decision in Pushpam Pharmaceutical Co. v. CCE 1995 Supp (3) SCC 462 and observed as under: 26 This Court in the case of Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay , while dealing with the meaning of the expression suppression of facts in proviso to Section 11A of the Act held that the term must be construed strictly. It does not mean any omission and the act must be deliberate and willful to evade payment of duty. The Court, further, held: - In taxation, it ( suppression of facts ) can have only one meaning that the correct information was not disclosed deliberately to escape payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. 27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. v. Collector of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in the proviso to Section 11A of the Act. 22. In Bharat Hotels Ltd. v. Commissioner of Central Excise (Adjudication) 2018 (12) GSTL 368 (Del.) this Court had, in the context of Section 73 (1) of the Act, held as under: 27. Therefore, it is evident that failure to pay tax is not a justification for imposition of penalty. Also, the word suppression in the proviso to Section 11A (1) of the Excise Act has to be read in the context of other words in the proviso, i.e. fraud, collusion, wilful misstatement . As explained in Uniworth (supra), misstatement or suppression of facts does not mean any omission. It must be deliberate. In other words, there must be deliberate suppression of information for the purpose of evading of payment of duty. It connotes a positive act of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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