Custom, Excise & Service Tax Tribunal
Bharat Sanchar Nigam Ltd vs Cce & St, Chandigarh-I on 24 October, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-SM
COURT-IV
Service Tax Appeal No.ST/58032/2013 [SM]
[Arising out of Order-in-Appeal No.33/ST/Appl/CHD-I/2013 dated 05.03.2013 passed by the Commissioner (Appeals), Customs & Central Excise, Chandigarh-I]
For approval and signature:
Honble Mr. R.K.Singh, 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?
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in
any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
authorities?
__________________________________________________
General Manager, Consumer Mobility
Bharat Sanchar Nigam Ltd. Appellant
Vs.
CCE & ST, Chandigarh-I Respondent
Present for the Appellant : Shri B.L.Narasimhan, Advocate
Present for the Respondent: Shri Devender Singh, DR
Coram: Honble Mr. R.K.Singh, Member (Technical)
Date of Hearing/Decision: 24.10.2014
FINAL ORDER NO. 54229/2014
PER: R.K.SINGH
Heard both sides. The issue involved in this appeal is the admissibility of cenvat credit on pre-fabricated buildings/shelters/pandals which were used by them for housing/storage of generating sets and other components/spares at their transmission sites - and the invokability of time bar. Vide Order-in-original No.1/ST/ADC/ADJ/2011-12 dated 09.06.2011, the Original adjudicating authority disallowed the cenvat credit of Rs.38,51,598/- and ordered recovery thereof alongwith interest and penalty upholding wilful misstatement or suppression on the part of the appellant. The Original adjudicating Authority held that the impugned items were not eligible to be called as inputs or capital goods and therefore, cenvat credit in respect thereof was not admissible and that the appellants also indulged wilful misstatement/ suppression of facts on their part inasmuch as they did not disclose the fact in their ST.3 returns. The original adjudicating authority as well as the first appellate authority have also held that the onus was on the appellants to prove that they were eligible for the impugned credit and that they have not been able to discharge that onus and further that the definition of inputs and capital goods in Rule 2 of Cenvat Credit Rules clearly precluded the impugned items and the fact that the appellants took impugned credit in-spite of that shows wilful misstatement/ suppression of facts on their part.
2. The appellants concede that as far as the issue on merit is concerned, the judgement of Bombay High Court in the case of Bharati Airtel Ltd. Vs. CCE, Pune-III 2014 TIOL 1452- HC Mum - ST has clearly held that impugned items are not eligible to be called input or capital goods and therefore the excise duty paid thereon is not eligible for cenvat credit under the Cenvat Credit Rules. The appellants, however, strongly argued that there has been no wilful misstatement or suppression of facts on their part.
3. I find that the allegation of wilful misstatement was on the basis of the following sentences, the notice appeared to have wilfully misstated the facts in their ST - 3 return with intent to evade payment of duty. It is not clear from the show cause notice as to what has been misstated in their ST-3 returns. The adjudicating authority while dealing with this issue sustained the charge on the ground that in their ST - 3 return they never disclosed that they are availing/utilizing Cenvat credit on the impugned items and these monthly returns only show the credit taken on account of all inputs/ capital goods and input services. Details of credit were never disclosed to the Department. Here again the adjudicating authority does not bring out as to what was not disclosed which was required to be disclosed under any provision of law. Same is the case in respect of the Order-in-Appeal the Commissioner (Appeals) has observed that there is nothing on record to show that in what manner the appellant had declared to the Department that they had taken credit of duty paid on items goods by treating the same as capital goods. The appellant has not adduced any evidence showing that they had ever disclosed the details of the impugned cenvat credit alongwith the description/quantity of the impugned goods and therefore, extended period of limitation has rightly been invoked. Neither Adjudicating Authority nor Appellate Authority has been able to bring out as to what were the details which the appellant were required to declare as per law which they had not declared. It is well established that mere non-declaration of what is not required to be declared can never tantamount to suppression/ misstatement. The appellants have been filling all details in ST-3 returns. Indeed the Commissioner (Appeals), Hyderabad in respect of BSNL of similar items held the credit to be admissible (1002-05/2011-12/Taxation/BSNL/425 & 73/2012 (H-III-CE) dated 28.09.2012 and based on that decision, BSNL issued internal Circular that the cenvat credit on the impugned items has been held to be admissible.
4. The ld. AR points out that the decision of the Commissioner (Appeals) is of much later date than the period covered in the present case. The fact, however, remains that the decision of the Commissioner (Appeals) clearly indicates that there was confusion/ ambiguity regarding admissibility of impugned credit. The Honble Supreme Court in the case of Chemphar Drugs Liniments 2002TIOL266SC-CX has held that for sustaining the allegation of suppression, something positive other than mere inaction or failure on the part of the assessee has to be brought out to sustain allegation of wilful misstatement/suppression. In Gopal Zarda Udyog vs. CCE, Delhi 2005-TIOL-123-SC-LB the Supreme Court held that mere failure or negligence on the part of the manufacturer does not attract extended period.
5. The ld. DR drew my attention to Boards Circular No.58/1/2002 CX dated 15.01.2002 which deals with excisability of plant and machinery assembled at site. BoardsCirculars have no statory or binding force on quasi-judicial authorities. Also the said circular has no consequence as far as the above discussion on the issue of time-ar is concerned.
6. In view of the forgoing, while the appeals admittedly fail on merit, I find that the grounds for invoking the extended period and mandatory penalty are clearly unsustainable and inadequate. The period involved in this case is 10.09.2004 to March, 2006. Show cause notice was issued on 29.04.2010. Therefore, entire demand is barred by limitation.
7. In the light of the foregoing, I allow the appeal and set aside the impugned demand, interest and penalty.
(R.K. SINGH) MEMBER (TECHNICAL) Anita ??
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