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TMI Blog2025 (1) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ws:- (i) the Appellant had wrongly availed Cenvat credit amounting to Rs.1,16,924/- in contravention of Rule 3, 4 & 9 of the Cenvat Credit Rules, 2004 as (a) the appellant has taken Cenvat Credit on the strength of documents, which were not in the name of the Appellant; (b) the Appellant has also taken Cenvat Credit on the documents, which are older than six months as on 01.09.2014; (c) the Appellant had availed Cenvat Credit on vehicle repair, maintenance & Insurance and Hotel service. (ii) The appellant had not paid service tax of Rs. 5,75,924/- under reverse charge on sales commission paid to foreign agents for the period Sept. 2013 to Sept., 2014. Therefore, the SCN dated 30.08.2016 was issued to the Appellant proposing recovery of such inadmissible Cenvat credit of Rs.1,16,924/- and also for demand of Service tax of Rs.5,75,134/- along with applicable interest and alleging penalty under Rule 15 of the Cenvat Credit Rules, 2004 and under section 78 of the Finance Act, 1994. The subject show cause notice was adjudicated by the Assistant Commissioner of Service Tax Division, Bhiwadi vide Order-In-Original No. 17/CE/2017-18 dated 29.11.2017, wherein adjudicating authority has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goenka Private Limited Vs Commissioner CGST Delhi South [Vide Final Order No. 51088/2023 dated 21.08.2023] * Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay [1995(78) ELT 401 (SC)] * Cosmic Dye Chemical Vs. Collector of Central Excise, Bombay. [1995 (75) ELT 721 (SC)] * Collector of Central Excise Vs. H.M.M. Ltd. [1995 (76) ELT 497 (SC)] * Easland Combines, Coimbatore Vs. CCE Coimbatore. [(2003) 3 SCC 410] * Uniworth Textiles Limited Vs. Commissioner of Central Excise, Raipur. [2013 (288) ELT 161 (SC)] * Continental Foundation Joint Venture Vs. CCE Chandigarh. [2007 (216) E.L.T. 177 (SC)] 3.1 Ld Counsel contended that suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of tax. Since the basic ingredients for invoking extended period under Section 73 of Finance Act, 1994 and Section 11 of Central Excise Act do not, therefore, stand satisfied; the demand is liable to be dropped on this ground alone. Since there was no suppression of facts and there was no intent to evade payment of Service tax, the extended period for deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned counsel for the appellant submitted that the availment of input credit of tax paid on Mobile communication bills which were not in name of appellant but in name and address of Directors cannot be denied merely on this ground. There is no dispute about receipt of input services and use by the appellant and payment of bills has also been done by the appellant. There is no requirement under the CENVAT Credit Rules that the bill should be in name of manufacturer. There is no contravention of Rule 3 of CENVAT Credit Rules and all services were used by the appellant directly or indirectly in manufacture and are covered within ambit and scope of definition of "input service". It is well-settled that substantial benefit cannot be denied on procedural lapse. Reliance was placed on the decision of the Supreme Court dated 20th November 2008 in case of Sambhaji & Ors. Versus Gangabsal & Ors. The demand on ground that credit on bills pertaining to period prior to 01.09.2014 was availed after 6 months from the date of invoice is also not sustainable as there is no bar/ restriction on the availment of CENVAT credit services received prior to 1.9.2014 against bills which are above 6 month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diary was amended w.e.f. 01.10.2014 by including a person who arranges or facilitates supply of goods as Intermediary. Thus after 01.10.2014 the place of provision of service in respect of person who causes sale or purchase of goods or arranges goods shall be determined as per Rule 9(C). Accordingly, the place of provision of service will be location of the service provider. Therefore, prior to 01.10.2014 the place of provision of services in respect of persons who causes sales or purchase of goods or arranges goods is to be determined as per Rule 3 of POPS because the agents of the Appellant were outside the scope of Intermediary at that time and place of provision of service is required to be decided in terms of Rule 3. In such cases, the location of the receiver of the service i.e. service recipient would be the place of provision of service. In view of the above, ld. Authorized Representative prayed that present appeal may be dismissed. 8. We have heard the LD Counsel to the appellant and Ld AR for the department. The issued before us for consideration are as follows: i. Whether the demand of service tax vide SCN dated 06.01.2017 on payment made to commission agents on expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de payment of service tax, is against the well settled principles. Suppression of facts has to be primarily examined whether it was wilful and with an intent to evade payment of service tax. We note that the Hon'ble Supreme Court has held that suppression of facts has to be "wilful‟ and there should also be an intent to evade payment of service tax. The Hon'ble Supreme Court in Pushpam Pharmaceuticals Company, examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The Hon'ble Court observed that the proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since "suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itive act from the side of the assessee to find wilful suppression. In the instant case, it is an admitted fact that all the transactions were declared in the financial records and the objection arose on scrutiny of such financial documents by the audit team. The Department has not been able to establish any positive act of the appellant with an intent to evade. As 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 proviso to Section 11A of the Act. We also note that these two decisions in Pushpam Pharmaceuticals and Anand Nishikawa Company Ltd. were followed by the Supreme Court in the subsequent decision in Uniworth Textile Limited vs. Commissioner of Central Excise, Raipur [2013 (288) E.L.T. 161 (SC)]. Further, the Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh [2007 (216) E.L.T. 177 (SC)] also held: "10. The expression "suppression" has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such a loss of Revenue is the risk taken by the Board as a matter of policy.
d) Extended period of limitation cannot be invoked unless there is evidence of fraud or collusion or wilful misstatement or suppression of facts or violation of the provisions of Act or Rules with an intent.
e) Intentional and wilful suppression of facts cannot be presumed because (a) the appellant was operating under self-assessment or (b) because the appellant did not agree with the audit and claimed that CENVAT credit was admissible; or (c) because the appellant did not seek any clarification from the Revenue; or (d) because the officer did not conduct a detailed scrutiny of the Returns and the availment of CENVAT credit which is alleged to be inadmissible and was discovered only during audit."
13. We, therefore, find in favour of the appellant on the question of limitation, and hence it is not necessary to examine the remaining questions on the merits of the case. Since the SCN stands time-barred, confirmation of demand proposed in the said SCN is not sustainable. Accordingly, the impugned order is set aside and the appeal is allowed.
(Order pronounced in the open court on 09.01.2025 ) X X X X Extracts X X X X X X X X Extracts X X X X
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