Custom, Excise & Service Tax Tribunal
M/S.Bharat Aluminium Company Ltd vs Cce & St, Raipur on 12 July, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:24.05.2016
Date of Decision:12.07.2016
Excise Appeal No.E/50388/2016-EX(SM)
[Arising out of Order-in-Appeal No.BHO-EXCUS-002-APP-248-15-16 dated 30.11.2015 passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax, Chattisgarh.]
For Approval and Signature:
Honble Shri B. Ravichandran, Member (Technical)
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
M/s.Bharat Aluminium Company Ltd. Appellants
Vs.
CCE & ST, Raipur Respondent
Appearance:
Rep. by Ms. Sukriti Das, Advocate for the appellant. Rep. by Shri G.R. Singh, AR for the respondent. Coram: Honble Shri B. Ravichandran, Member (Technical) Final Order No.52446/2016 /Dated:12.07.2016 Per B. Ravichandran:
The appellants are engaged in the manufacture of Aluminium and are registered with the central excise department. They are availing cenvat credit on various inputs and services in terms of Cenvat Credit Rules, 2004. Consequent upon audit of the accounts of the appellant, proceedings were initiated against them to deny and recover cenvat credit of service tax amounting to Rs.43,59,861/- availed on construction service of staff quarters, school building and hospital building during 2008-09 to 2010-2011. The Original Authority confirmed the demand and imposed equal amount of penalty. On appeal, the Commissioner (Appeals) vide the impugned order dated 30.11.2015 upheld the original order. Aggrieved by this, the appellant preferred this appeal.
2. Ld. Counsel for the appellant submitted that on merit, they are eligible for service tax credit on all these transactions. However, ld. Counsel raised strong objection against the impugned order on the ground that the whole demand is hit by time bar in terms of Section 11 A of the Central Excise Act,1944. The period involved is 2008-2009 to 2010-2011, whereas the show cause notice was issued on 10.12.2012 which is clearly beyond the normal period. Neither the show cause notice nor the original order nor the appellate order gave any justifiable reason for invoking extended period of demand. The lower authorities simply contended that the appellants knowingly took ineligible credit and hence, extended period can be invoked . Ld. Counsel further submitted that the appellants have been filing regular statutory returns containing details of credits taken along with copy of cenvat credit register with the jurisdictional authorities. Regular audits have been conducted of their accounts. In fact, the present alleged ineligible credits were also pointed out by one such audit. They have maintained all the records as per the requirement of Cenvt Credit Rules and no material fact has been either mis-stated or suppressed from the authorities. Ld. Counsel strongly pleaded that the demand will not stand in view of the clear violation of time limit in terms of Section 11 A.
3. Ld. AR reiterated the findings of the Lower Authorities. He submitted that the credits on all these construction activities are not available to the appellants and they have taken deliberately such ineligible credits to benefit unduly. The invocation of extended period is legally correct.
4. Heard both the sides and examined all the records.
5. Though the appellants submitted both on merits and on time bar, the correctness of demand in terms of time limit prescribed as per Section 11 A is taken up for examination first. The admitted facts of the case are that the appellants have been filing statutory returns regularly on monthly basis containing details of credit. They also filed cenvat credit register along with such returns. The present proceedings were consequent upon audit of their accounts conducted by the officers. It is also a fact that the appellants were earlier issued with a show cause notice on 11.03.2011 based on a Special Audit Report conducted under Section 14 AA of the Central Excise Act, 1944 regarding inadmissible credit of service tax with reference to maintenance of hospitals, directors bungalow, club, etc. Though the said notice was not on construction activity but relates to same period (2008-2009) on allied services. In other words, Special Audit conducted did point out certain irregular availment of service tax credit in respect of hospitals, directors bungalow, club, etc. Based on such objection, proceedings were initiated vide show cause notice dated 11.03.2011. The present proceedings relating to hospitals, schools and staff quarters is again based on another audit report on the accounts of the appellant. This show cause notice was issued on 10.12.2012 covering the period of 2008-2009 to 2010-2011. These facts show that repeat audit including special audit has been conducted on the accounts of the appellants. The alleged inadmissible credits were pointed out based on the regular records maintained by the appellants. To invoke extended period of demand in terms of Section 11 A, the department is to adduce evidence of elements of fraud or collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the rules made thereunder with intent to evade payment of duty. The above factual circumstances and lack of any tangible evidence to support any one of the elements mentioned above, make the demand barred by limitation.
6. I have carefully perused the show cause notice, original order and the appellate order.
7. The show cause notice states in para-6 that the appellant, in spite of having knowledge that the cenvat credit on the said construction service is not admissible, have availed cenvat credit with intent to inflate their accounts and subsequently to debit the duty amount improperly from this inflated cenvat credit and thereby, evaded payment of central excise duty. The notice failed to substantiate the grounds on which the extended period of demand was issued. The appellants are claiming eligibility for these credits. The question of their having knowledge of such credit, being not admissible, has not been substantiated. Even if it is so, if the appellant take credit, which is disputable, that by itself, will not form basis for invoking fraud, etc. Further, two different audits have been conducted. Initially, certain service tax credits for the year 2008-09 were sought to be denied. Thereafter, based on another audit report, further service tax credits were sought to be denied which covered the said period also. The earlier demand was on the maintenance of these buildings whereas the latter demand was on construction of these buildings.
8. In the impugned order, the Commissioner (Appeals) recorded his finding regarding time bar and in para-6 and 7 of the order. He recorded that though the appellant have claimed to have filed statutory returns with cenvat credit details, they have not disclosed the cenvat credit availed on staff quarters, school buildings and hospital buildings. It is not clear on what basis such finding has been recorded. The credits taken by the appellants were reflected in the statutory records. If such credits were not available in the records, the question of their being pointed out by the audit does not arise. Further, ld. Commissioner (Appeals) examined the question of time bar with reference to time period between the knowledge of the department and issue of demand and held that knowledge of the department is not relevant to decide the relevant date. As mentioned earlier, the demand for the period 2008-2009 to 2010-2011 has been issued on 10.12.2012.On this basic fact, which is not disputed, the time bar has to be applied. No tenable reason has been recorded by the lower authorities for invoking extended period of demand in this case.
9. The extended period of limitation can be invoked in terms of the provisions specifically provided under Section 11A. As discussed above, suppression of fact was mentioned as reason for extended period of demand. In Pahwa Chemicals Private Ltd. 2005 (189) ELT 257 (SC), the Honble Supreme Court held that mere failure to declare does not amount to willful mis-declaration or willful suppression. There must be some positive act on the part of the party to establish either willful mis-declaration or willful suppression. In Anand Nishikawa Co. Ltd. 2005 (188) ELT 149 (SC), the Honble Supreme Court held that suppression of facts can have only one meaning that correct information was not deliberately disclosed to evade payment of duty. In Apex Chemicals Pvt. Ltd. 1992 (62) ELT 413 (Gujarat), the Honble Gujarat High Court held that information, which is not required to be submitted under the law, if not supplied does not amount to suppression. In the present case, the appellant availed credits under the belief that these are rightly eligible to them. No element of fraud or suppression or mis-statement could be brought out by the Revenue in the present case.
10. Considering the above discussion and analysis, I find that the demand against the appellant is hit by the limitation. Accordingly, the impugned order is set aside on this ground alone. The appeal is allowed.
[Order pronounced in court on 12.07.2016.] ( B. Ravichandran ) Member (Technical) Ckp.
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