TaxTMI 
TaxTMI 
2019 (5) TMI 1458
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...., while conducting an audit of the appellant for the period 01 April 2004 to 31 March 2006, noticed that the appellant had paid Service Tax amounting to Rs. 94,75,098/- on 'Goods Transport Agency Services' for the period April 2005 to September 2005 and had availed cenvat credit of this amount in the month of September, 2005, but this cenvat credit availed of by the Appellant was inadmissible and was required to be reversed under Rule 2(I)(i) of the Cenvat Credit Rules, 2004 (hereinafter referred to as Rules). The appellant accepted the remarks made in the audit report and reversed the credit amounting to Rs. 94,75,098/- from its Cenvat Credit balance on 31 March 2007, but did not pay interest on such Cenvat credit wrongly taken earlier. Paragraph 8 of the show cause notice that invokes the extended period of five years under the proviso to Section 73(1) of the Act is reproduced below: "8. Therefore, the said CENVAT credit wrongly taken/utilized by the assessee is required to be demanded and recovered from then with interest and the proviso to Section 73(1) read with Rule 14 of the CENVAT Credit Rules, 2004 and Section 75 of the Finance Act, 1994 by invoking extended period of fi....
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.... the appellant that the extended period of limitation for issuing the show cause notice could not be invoked in the present case. It is his submission that the show cause notice contained an allegation that the appellant had not paid service tax by reason of suppression of facts, but there is no averment in the show cause notice that the suppression was wilful and with an intention to evade payment of service tax nor does the impugned order give any justification to invoke the extended period of limitation. It is, therefore, his submission that the impugned order deserves to be set aside for this reason alone. In support of his submission, learned Counsel placed reliance upon the decisions of the Supreme Court in Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay reported in 1995 (78) ELT 401 (SC) and Associated Cement Companies Limited vs. Commissioner of Customs reported in 2001 (128) ELT 21 (SC). Learned counsel has also placed reliance on the decision of the Supreme Court in Uniworth Textiles Limited vs. Commissioner of Central Excise, Raipur reported in 2013 (288) ELT 161 (SC), that has considered the aforesaid two decisions. 8. Shri T.G. Rathod, learned....
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....facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "one year", the words "five years" had been substituted." 12. The show cause notice was required to be issued within one year from the relevant date but is was not. It is, for this reason that the Department, relying upon the proviso to Section 73(1) of the Act, invoked the extended period of limitation of five years. 13. The contention of the learned counsel for the appellant is that under the proviso to Section 73(1) of Act, where any service tax is not levied or not paid or short paid or short levied or erroneously refunded by reason of fraud or collusion or wilful misstatement or suppression of facts or contravention of any of the provisions of the Chapter with intent to evade payment of service tax, the notice can be issued within the extended period of five years from the relevant date. 14. The provisions of Section 11A the Central Excise Act, 1944 which are almost identical to the provisi....
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....ount to wilful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made hereinabove that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in the proviso to Section 11-A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to CEGAT to come to a conclusion that the appellant was guilty of "suppression of facts." (emphasis supplied) 17. In Easland Combines, Coimbatore V/s Collector of Central Excise, Coimbatore reported in (2003) 3 SCC 410, the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient ....
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....latter implies making of an incorrect statement with knowledge that the statement was not correct." (emphasis supplied) 20. In the present case it needs to be noted that paragraph 8 of the notice, reproduced, above merely mentions that the extended period of five years was being invoked as the assessee suppressed the facts from the department. The show cause notice does not allege that the suppression was with an intention to evade payment of Service Tax. It was, therefore, pleaded by the Appellant in reply to the show cause notice that the extended period of limitation could not be invoked. This plea is also mentioned in paragraph 10 of the impugned order. This has, however, not been considered by the Adjudicating Authority in the impugned Order. The Commissioner completely failed to appreciate that the extended period of five years could have been invoked only when the appellant suppressed facts with an intent to evade payment of Service Tax. All that has been observed by the Commissioner is that Cenvat Credit in respect of Goods and Transport Services was wrongly taken by the Appellant. This would not be sufficient to attract the extended period of limitation. 21. This apart....