2023 (2) TMI 1426 - AT - Service Tax

Partial relief: Demand of Rs.14,86,351 for CENVAT on clubhouse inputs time-barred under Section 73; Rs.5,46,131 sustained.

CESTAT allowed the appeal in part, holding that the demand of Rs. 14,86,351 for CENVAT credit on inputs for club-house construction was time-barred under ... CENVAT Credit of the Service Tax paid on inputs going into the construction of club house - SCN exceeded the limitation period provided by Section 73 of the Finance Act, 1994 - HELD THAT:- It is found that during the relevant period, normal period for issue of demand was 18 months. In the present case, the demand of Rs. 14,86,351/- was raised after laps of 18 months and therefore the same is hit by limitation. The impugned order is set aside to the extent the same was hit by limitation. Some demand falls within the normal period since the Service Tax was not paid on the output service, it is not required to interfere with the conformation of demand of Rs. 05,46,131/- and penal action for the same ordered in the impugned order. The appeal is partially allowed. The appellant had availed CENVAT credit of Rs. 20,32,842/- on inputs used in construction of a club house without payment of Service Tax on the output service. A demand of Rs. 14,86,351/- for 2012-13 was raised by issue of a show cause notice dated 15.10.2015; the return had been filed on 04.09.2013. The tribunal finds that the applicable limitation period was 18 months for issuance of demand. Because the show cause notice was issued after the 18-month period, the tribunal holds that the demand 'is hit by limitation' and states: 'The impugned order is set aside to the extent the same was hit by limitation.' However, part of the demand related to Service Tax not paid on the output service falls within the normal period; the tribunal therefore 'do[es] not interfere with the confirmation of demand of Rs. 05,46,131/- and penal action for the same ordered in the impugned order.' The appeal is 'partially allowed' on these grounds.