2024 (1) TMI 777 - AT - Service Tax

Extended limitation under section 73(1) cannot be invoked for irregular CENVAT credit without deliberate suppression

Delhi Airport Metro Express Pvt. Ltd. Versus Commissioner of Central Excise & Customs, Rohtak, Haryana

Delhi Airport Metro Express Pvt. Ltd. Versus Commissioner of Central Excise & Customs, Rohtak, Haryana - TMI Issues Involved:1. Entitlement to avail CENVAT credit.2. Entitlement to refund under section 142(8) of the CGST Act.3. Invocation of the extended period of limitation under the proviso to section 73(1) of the Finance Act.Summary:Entitlement to Avail CENVAT Credit:The appellant, M/s Delhi Airport Metro Express Pvt. Ltd., availed CENVAT credit on service tax paid on input services received from outside India and countervailing duty (CVD) paid on imported goods used for activities under the Concession Contract with Delhi Metro Rail Corporation. The Commissioner disallowed the CENVAT credit amounting to Rs. 65,01,43,929/- and ordered its reversal/recovery with interest and penalty, asserting that the goods and services were used exclusively for non-taxable/exempt services related to the Airport Metro Express Line.Entitlement to Refund:If the appellant's claim for CENVAT credit is upheld, the issue arises whether the appellant is entitled to a refund of Rs. 65,01,43,929/- under section 142(8) of the CGST Act. The Tribunal did not examine this issue in detail as it set aside the Commissioner's order on the ground of limitation.Invocation of Extended Period of Limitation:The primary issue was whether the extended period of limitation under the proviso to section 73(1) of the Finance Act could be invoked. The Tribunal concluded that the extended period could not be invoked as the necessary ingredients, such as willful suppression of facts with intent to evade payment of service tax, were not present. The appellant had disclosed all relevant facts in the ST-3 returns, and the department was aware of the facts during the audit conducted in September 2010. The show cause notice issued on 20.07.2012 was beyond the one-year limitation period, and the Tribunal held that the appellant had not suppressed any information from the department.Conclusion:The Tribunal set aside the impugned order dated 12.12.2014 passed by the Commissioner, disallowing CENVAT credit and ordering its reversal with penalty and interest, as the entire amount covered by the show cause notice and the order was under the extended period of limitation, which was not justified. The appeal was allowed, and the appellant was advised to claim a refund in appropriate proceedings. The Tribunal expected that any application for refund filed by the appellant would be decided expeditiously and in accordance with law.