Gujarat High Court
The Commissioner Central Excise And ... vs M/S.Saurashtra Cement ... on 28 January, 2016
Author: Akil Kureshi
Bench: Akil Kureshi, Mohinder Pal
O/TAXAP/52/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 52 of 2016
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THE COMMISSIONER CENTRAL EXCISE AND SERVICE TAX....Appellant(s)
Versus
M/S.SAURASHTRA CEMENT LIMITED....Opponent(s)
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Appearance:
MR YN RAVANI, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 28/01/2016
ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Revenue has filed the appeal against the judgement of the CESTAT dated 10.06.2015 raising following questions for our consideration:
"(i) Whether the Tribunal is correct in holding that extended period cannot be invoked and demand has to be restricted to the period within one year from the date of show cause notice when the issue regarding admissibility of Cenvat Credit of Service Tax paid on "Guest House & Colony maintenance"
was disputable one in as much as decision of Tribunal in favour of other assessee is subsequently reversed by higher Appellate forum?
(ii) Whether the Tribunal is correct in relying upon the decision of Tribunal Ahmedabad in case of GHCL vs. CCE, Bhavnagar [2009 (016) STR 0089 (Tri.Ahmd.)] When facts of Page 1 of 4 HC-NIC Page 1 of 4 Created On Tue Feb 02 00:41:20 IST 2016 O/TAXAP/52/2016 ORDER the said decision is deferent to this case?
(iii) Whether the Tribunal is correct in holding that intention to evade duty cannot be attributed when the issue of admissibility of Cenvat Credit of Service Tax paid on "Guest House & Colony maintenance" was disputed so as to impose penalty under Rule 15(2) of CCR, 2004 readwith Section 11AC of CEA,1944 when Rule 9(6) of CCR, 2004 cast burden of proof regarding the admissibility of the CENVAT credit upon the manufacturer or provider of output service taking such credit?"
2. From the materials on record, it emerges that, the issue pertains to extended period of limitation and, penalty imposed on the assessee. The principal tax liability pertains to the CENVAT credit availing on service tax of guest house and colony maintenance. The assessee before the Tribunal did not dispute the liability in view of the decision of Gujarat High Court in case of Commissioner of Central Excise & Customs vs. GHCL reported in 2011 (22) STR 610. However, they disputed the invocation of the extended period of limitation of imposing of penalty. In this context, the Tribunal held and observed as under:
"4. Heard both sides and perused the case records. Appellant is not contesting the issue on merits but has contested the issue on time bar. It is the case of the appellant that the issue of admissibility of cenvat credit on the services availed on the Guest House and Colony maintenance services was only decided by the jurisdictional High Court in the case of CCE & Cus. Vs GHCL (supra) when the earlier decision passed by CESTAT Ahmedabad, in the case of GHCL vs. CCE, Bhavnagar (supra) was in their favour. It is observed that when an issue is disputable and a final view taken by this Bench was Page 2 of 4 HC-NIC Page 2 of 4 Created On Tue Feb 02 00:41:20 IST 2016 O/TAXAP/52/2016 ORDER in favour of the assessee then appellant had a bonafide belief that cenvat credit was admissible of these services. Favourable view taken by CESTAT was reversed by Hon'ble Gujarat High Court in the case of CCE & Cus., Bhavnagar vs. GHCL (supra) in 2011. Under this factual matrix extended period cannot be invoked and demand has to be restricted to the period within one year from the date of show cause notice. The amount involved within the period of one year should be worked out by the adjudicating authority and communicated to the appellant. The same should be paid by the appellant alongwith interest.
5. So far as imposition of penalty upon the appellant is concerned, no intention to evade duty can be attributed to the appellant when the issue of admissibility of cenvat credit on the amount of service was disputed. Accordingly, penalty imposed by the adjudicating authority under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 111AC of the Central Excise Act, 1944 is set aside."
3. It can thus be seen that the case of the assessee on the issue of payment of CENVAT credit on such services was decided by the High Court later on and, till then, the decision of the Tribunal was in favour of the assessee, was accepted by the Tribunal. It was, therefore, held that when the issue was disputable and, at one point of time, the view of the Tribunal was in favour of the assessee, there was no question of invocation of extended period of limitation of imposing penalty.
4. We see no error in the view of the Tribunal. No question of law arises. Tax appeal is dismissed.
Page 3 of 4 HC-NIC Page 3 of 4 Created On Tue Feb 02 00:41:20 IST 2016 O/TAXAP/52/2016 ORDER (AKIL KURESHI, J.) (MOHINDER PAL, J.) Jyoti Page 4 of 4 HC-NIC Page 4 of 4 Created On Tue Feb 02 00:41:20 IST 2016