Custom, Excise & Service Tax Tribunal
M/S. Sarvottam Emery Stones vs C.C.E.&S.T., Jaipur-Ii on 17 September, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 17.09.2015
For Approval & Signature :
Honble Mr. S.K. Mohanty, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No. ST/52409/2014-ST[SM]
[Arising out of Order-in-Appeal No.05-06(OPD)ST/JPR-II/2014, dated 24.01.2014 passed by the C.C.E.(Appeals), Jaipur-II]
M/s. Sarvottam Emery Stones Appellant
Vs.
C.C.E.&S.T., Jaipur-II Respondent
Appearance Mr. O.P. Agarwal, CA - For Appellant Ms. KV. Kumar, DR - For Respondent CORAM: Honble Mr. S.K. Mohanty, Member (Judicial) Final Order No.53988/2015, dated 17.09.2015 Per Mr. S.K. Mohanty :
The brief facts of the case are that the appellant was engaged in manufacture of flour mill and emery mill stones falling under Chapter 84 of the Central Excise Tariff Act, 1985. For procurement of raw-material and despatch of finished goods, the appellant engaged the Goods Transport Agency (GTA) service, on which in terms of Rule 2(i)(d)(v) of Service Tax Rules, 1994, the appellant was liable to pay service tax under reverse charge mechanism. The period involved in this case is from 01.01.2005 to 31.12.2007. For non-payment of service tax, the Department initiated proceedings against the appellant and in the adjudication order dated 28.03.2011, the Addl. CCE&ST had confirmed the demand of Rs.11,44,984/- and also imposed equal amount of penalty under Section 78 of the Finance Act, 1994. Besides, penalty of Rs.5,000/- also imposed under Section 77 of the Act. In appeal, the Commissioner (Appeals) has upheld the said demand and thus, the present appeal before this Tribunal.
2. Shri OP Agarwal, ld. consultant for the appellant submits that the service tax demand is not sustainable on merits as per the Notification No.34/2004-ST, dated 03.12.2004, since the freight of full truck load has not exceeded Rs.1,500/-. He further submits that in some of the cases, freight charges related to transportation of goods in a goods carriage is less than Rs.750/- and as per the said Notification, transportation of goods was exempted from whole of service tax leviable. Ld. consultant further contended that the issue involved in this case relates to interpretation of provisions of Notification issued under Finance Act, 1994, and as such, suppression of fact with intent to evade payment of tax, cannot be levelled, justifying invocation of extended period of limitation. To support his stand that extended period cannot be invoked in the present case, ld. consultant has relied on the judgement of the Honble Supreme Court in the cases of Orissa Bridge & Construction Corporation Ltd. Vs. CCE [2011 (264) ELT 14 (SC) and Commissioner Vs. Gammon India Ltd. [2002 (146) ELT A-813 (SC)].
3. On the other hand, ld. Departmental Representative appearing for the Revenue reiterated the findings recorded in the impugned order.
4. Heard both the sides and perused the records.
5. I find from the Show Cause Notice that all the relevant documents were furnished by the appellant before the jurisdictional service tax authorities, under the cover of its letter dated 15.02.2008 and thereafter, the Show Cause Notice was issued on 26.11.2009 invoking the extended period of limitation as per the proviso to Section 73 (1) of the Finance Act, 1994. Since the activities of the appellant regarding its availing the services of GTA was known to the Department away back in February, 2008, the Show Cause Notice should have been issued within one year from the date of its knowledge. Since the proceedings have been initiated beyond the period of one year, I am of the view that the same is barred by limitation of time and the demand cannot be sustained on this ground alone.
6. I find that the Honble Supreme Court, in the case of Orissa Bridge & Construction Corporation Ltd. Vs. CCE (supra), while dealing with the limitation aspect for issuance of Show Cause Notice have held that the Department is not justified in invoking the extended period of limitation after a gap of approximately two years from the date of inspection of the factory of the assessee. Further, on an identical issue, Honble Supreme Court in the case of Commissioner Vs. Gammon India Ltd. have upheld the view of this Tribunal that Show Cause Notice issued nearly two years after the completion of enquiry, alleging suppression of facts and invoking the extended period of limitation is not sustainable. Further, by relying on the above judgements of the Honble Supreme Court, this Tribunal in its Final Order No.A/1390-1392/12-SM(BR.) dated 14.09.2012 in the case of M/s. Basuki Synthetics Pvt. Ltd. Vs. CCE, Jaipur-II has also taken the view that proceedings cannot be initiated beyond the period of one year from the date of knowledge of activities of the assessee.
7. In view of the above settled principles of law, I am of the opinion that the impugned order is not sustainable. Therefore, the same is set aside and the appeal is allowed in favour of the appellant.
[Operative portion pronounced in the open court] (S.K. Mohanty) Member (Judicial) SSK -2-