With due respect, I most humbly disagree with the categorical statement made in earlier post above that 'The ingredients i.e. suppression of facts etc. of Section 74 of CGST Act read with Section 20 of IGST Act are clearly present in this case. Hence hit by Section 17(5)(i) of CGST Act.'.
It is well settled position of law that 'charge of suppression of facts with intention to evade taxes' (i.e. to invoke extended period of limitation to issue SCN or to levy equal penalty u/s 74 or both) does not stand a legal scrutiny when tax-payer himself was eligible for tax-credit if those taxes were indeed paid by him in the past (i.e. when same became due as payable under law) under reverse charge mechanism.
In support on said well settled legal position, we quote following rulings:
A. Larger Bench Decision (5 member Bench) in cease of JAY YUHSHIN LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NEW DELHI as reported in 2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI:
"Original adjudicating authority failed to appreciate Order in Para 13(c) of above-said order in proper perspective which reads as follows: With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods'
B. M/S BRITISH AIRWAYS VERSUS COMMISSIONER (ADJN), CENTRAL EXCISE, DELHI, as reported in 2014 (6) TMI 626 - CESTAT NEW DELHI (LB) wherein it was held as follows:
“32. As regards the question of longer limitation period under Proviso to Section 73(1) of the Finance Act, 1944, the same would not be available to the Department, as no intention to contravene the Provisions of Finance Act, 1994 and of the rules made there under can be attributed to the Appellant for the reason that even if they are required to pay service tax on the service, in question, provided by CRS/GDS Companies, the entire service tax paid would be immediately available to them as Cenvat Credit and collection of service tax from the Appellant would be a revenue neutral exercise. A Larger Bench of the Tribunal in case of JAY YUHSHIN LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NEW DELHI as reported in 2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI, has held that in such circumstances where revenue neutral situation comes about in relation to the credit available to the assessee himself of the duty paid by him and not by the way of availability of credit to the buyer of the assessee's manufactured goods [para 13(b) of the judgment], longer limitation period under Proviso to Section 11A (1) of Central Excise Act, 1994 would not be applicable. The ratio of this judgment is squarely applicable to the facts of this case, as the Provisions of Section 11A (1) of Central Excise Act, 1944 are in pari-materia with the Provisions of section 73 (1) of the Finance Act, 1994. Since in this case, intention to evade the tax is absent, the penalty under section 78 of Finance Act, 1994 would not be attracted
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C. JAIN IRRIGATION SYSTEMS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NASHIK, as reported in 2015 (9) TMI 160 - CESTAT MUMBAI.
These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation.
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