Custom, Excise & Service Tax Tribunal
M/S. Usha International Ltd vs Cce, Hyderabad on 31 January, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing:31/01/2012
Date of decision:31/01/2012
Application No.E/Stay/39/2011
Appeal No.E/43/2011
(Arising out of Order-in-Appeal No.102/2010(H-IV)CE dt. 20/09/2010 passed by CC,CE&ST(Appeals), Hyderabad)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
Honble Mr. B.S.V. Murthy, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Usha International Ltd.
..Appellant(s)
Vs.
CCE, Hyderabad
..Respondent(s)
Appearance Mr. V.J. Sankaram, Advocate for the appellant.
Mr. Ganesh Haavanur, Addl. Commissioner for the Revenue.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) Honble Mr. B.S.V. Murthy, Member(Technical) FINAL ORDER No._______________________ [Order per: P.G. Chacko] This application filed by the appellant seeks waiver and stay in respect of the amounts adjudged against them. After a perusal of the records and hearing both sides, we are of the view that the appeal is fit for summary disposal. Accordingly, after dispensing with predeposit, we take up the appeal.
2. This appeal is directed against a demand of duty of Rs.12,65,212/- for the period 2004-05 and 2005-06 as also against equal amount of penalty. The impugned demand is consequential to denial of CENVAT credit of the service tax paid by the appellant on a service imported from abroad. Prior to 18/04/2006, the date w.e.f. which Section 66A of the Finance Act, 1994 was enacted, there was no liability for a resident Indian recipient of taxable services imported from abroad. The period of dispute in this case is prior to the said date. Nevertheless, the appellant paid service tax on the service imported by them during that period. They also took credit thereof and utilized such credit for payment of duty on their finished goods. The impugned demand arises out of the Departments view that the appellant was not entitled to avail CENVAT credit of the service tax paid on the imported service which, according to the Department, was not an input service. This view was contested by the assessee. As the relevant show-cause notice was beyond the normal period of limitation, the assessee contested the demand on the ground of limitation also. Both on merits and on limitation, the assessees case was rejected by the adjudicating authority and its decision came to be affirmed by the Commissioner(Appeals). Hence the present appeal.
3. After hearing both sides, we are of the view that the appellant has a clear case against the impugned demand on the ground of limitation. During the material period, the assessee admittedly filed returns and paid service tax on the gross amount paid to their foreign commission agent as consideration for the service rendered by the latter. Obviously, this fact was within the knowledge of the Department. When the assessee paid duty of excise on their excisable product, they utilized the above credit, which fact was also borne on the relevant returns filed with the Department. Thus the utilization of CENVAT credit was also known to the Department. On a perusal of the show-cause notice, we note that the following allegation was raised against the assessee for invoking the extended period of limitation:
And whereas the assessees are not filing any documents along with the E.R.1 Returns filed in the Range office. Thus they have suppressed the information of availment credit on service tax paid on services received from foreign commission agencies without mentioning in the monthly returns filed by them under Rule 12 of Central Excise Rules, 2002. As such it appears that the assessees deliberately with an intention to avail credit for which otherwise they are not eligible and willfully suppressed such availment in monthly returns and kept the department in dark. Availment of such irregular credit came to the knowledge of the department only during the course of audit of the accounts of assessees by the audit party. Had the audit of the accounts of the units not taken place, irregular availment of credit by assessees could not have been detected.
4. The above allegation is clearly untenable on the facts and circumstances which we have already noted. It is not in dispute that the entire demand is beyond the normal period of limitation. Having found no suppression (let alone willful) of any fact by the assessee as alleged in the show-cause notice, we are constrained to hold that entire demand is time-barred. It is ordered accordingly. Consequently, the penalty also gets set aside. In the result, the appeal is allowed. Stay application also stands disposed of.
(Pronounced and dictated in open court) (B.S.V. MURTHY) MEMBER (TECHNICAL) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 4