TaxTMI 
TaxTMI 
2026 (3) TMI 1316
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....er-alia, taken cenvat credit on tippers as capital goods. The department was of the view that the tippers are classified as motor vehicles falling under Chapter 87 of the Central Excise Tariff Act, 1985 (Tariff Act) and cenvat credit on motor vehicles are not allowed under the Cenvat Credit Rules, 2004 (CCR). It was further noticed that the credit was taken on the basis of an ineligible document, namely, commercial invoice. It was also seen that credit was taken on cranes on documents not addressed to their premises, but to their manufacturing unit located at different premises. Furthermore the appellant had wrongly availed abatement under Notification No.01/2006 ST dated 01.03.2006 for construction service by not fulfilling the condition of non-availment of cenvat credit prescribed thereon. Hence Show Cause Notice No.218/2012 dated 24.04.2012 (SCN) was issued proposing to deny the credits, demand service tax consequent to improper availment of notification No.1/2006ST and impose penalties. After due process of law the Adjudicating Authority vide Order-in-Original No.31/2014 dated 30.05.2014 confirmed the demand along with applicable interest and imposed equivalent penalty under Se....
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.... (3) G.S.T.L. 404 (Tri.- Del), Jindal Stainless Steel Ltd. vs. Commissioner of C. Ex. Cus. (A), Visakhapatnam-2009(245) E.L.T.244 (Tri.-Bang.) and Bharat Heavy Electricals Ltd. vs Commissioner of CE, 2014 (34) STR 430 (Tri.-Mumbai) in support of the Appellant's contentions. 5. Ms. Rajni Menon Ld. Authorised Representative appearing for the respondent reiterated the findings in the impugned order. 6. We have heard the rival submissions, perused the appeal records and the citations submitted. 7. The issues that arise for determination are : A. Whether the Demand is wholly barred by limitation as contended by the Appellant? B. If the demand is not barred by limitation, then on merits whether the Appellant is eligible for the credit and benefit of exemption notification No.1/2006-ST claimed, as contended by the Appellant ? 8. When a plea that the demand is wholly barred by limitation is raised, we find it apposite to deal with the said issue first. The question of limitation goes to the root of the matter and involves a question of jurisdiction to raise the demand itself in the first instance. This in turn is premised on the provisions of law that prescrib....
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....ion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word "one year", the word "five years" has been substituted. 11. The "relevant date‟ has been defined in section 73 (6) of the Finance Act as follows: "73 (6) For the purposes of this section, "relevant date" means, - (i) in the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short-paid- (a) where under the rules made under this Chapter, a periodical return, showing particulars of service tax paid during the period to which the said return relates, is to be filed by an assessee, the date on which such return is so filed; (b) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (c) in any other case, the date on which the service tax is to be paid under this Chapter or the rules made thereunder; (....
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....r", the words "five years" had been substituted. Explanation - Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of eighteen months or five years, as the case may be." 21. The meaning of the words 'wilful misstatement' and 'suppression of facts' has been a subject matter of judicial scrutiny in various Supreme Court judgments which are necessary to be discussed before proceeding to the merits of this case. However, these words have been interpreted as given in Sections 28 of the Customs Act, 1962 (hereinafter referred to as "the Customs Act") and 11A of the [Central] Excise Act, 1944 (hereinafter referred to as "the Excise Act"). In order to determine if the same interpretation extends to Section 73 of the Act the following decisions of the Supreme Court have to be looked at. In the case of Uniworth Textiles Ltd. v. Commissioner of Central Excise, Raipur [(2013) 9 SCC 753 = 2013 (288) E.L.T. 161 (S.C.)] the Supreme Court discussed its previous judgments to determine the applicability of the proviso to Section 28 of the Customs Act for extension of limitation period for issu....
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....t or suppression of facts. Since the said show cause notice was issued after the elapse of six months, the revenue, for its action to be legal in the eyes of law, can only take refuge under the proviso to the section." 22. Section 28 of the Customs Act like Section 73 of the Act (in this case) relates to notice for payment of duty that has not been levied, short-levied or erroneously refunded. The proviso to Section 28 of the Customs Act and the proviso to Section 73(1) of the Act, both set out conditions for extension of limitation period for issuing of a Show Cause Notice. The difference between the two sections lies in the insertion of conditions of 'fraud' and 'contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of Service Tax' in Section 73 of the Finance Act, 1994. In Uniworth (supra), the Supreme Court discussed the interpretation of the proviso of a similar provision in Section 11A of the Excise Act and held that it is pari materia to the proviso to Section 28 of the Customs Act. The relevant paragraphs are excerpted below : "13. This Court, in Pushpam Pharmaceuticals Co. v. Collector of Centr....
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....words 'with intent to evade payment of duty'. It is, therefore, not correct to say that there can be a suppression or misstatement of fact, which is not wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11A. Misstatement or suppression of fact must be wilful. The aforesaid observations show that the words "with intent to evade payment of duty" were of utmost relevance while construing the earlier expression regarding the misstatement or suppression of facts contained in the proviso. Reading the proviso as a whole the Court held that intent to evade duty was essentially before the proviso could be invoked. 55. Though it was sought to be contended that Section 28 of the Customs Act is in pari materia with Section 11A of the Excise Act, we find there is one material difference in the language of the two provisions and that is the words "with intent to evade payment of duty" occurring in proviso to Section 11A of the Excise Act which are missing in Section 28(1) of the Customs Act and the proviso in particular.... 56. The proviso to Section 28 can inter alia be invoked when any duty has not been levied or has been short....
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....s that there should be an intention to evade payment of duty behind these acts. And, therefore, in Uniworth (supra), the judgments of the Supreme Court interpreting the proviso to Section 11A of the Excise Act were applied in the interpretation of the proviso to Section 28 of the Customs Act. 25. The meaning of the phrase pari materia has been explained in an American case in the following words: "Statutes are in pari materia which relate to the same person or thing, or to the same class of persons or things. The word par must not be confounded with the word simlis. It is used in opposition to it - intimating not likeness merely but identity. It is a phrase applicable to public statutes or general laws made at different times and in reference to the same subject." [United Society v. Eagle Bank, (1829) 7 Connecticut 457, p. 470, as cited in CRAIES, Statute Law, p. 134 (7th Edition)]. The provisos to Sections 11A of the Excise Act, 28 of the Customs Act and Section 73 of the Finance Act, refer to the same class of persons, i.e., persons from whom tax have not been levied, or has been short-levied or erroneously refunded. The subject matter of these provisos is issuance of a ....
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....t or erroneous refund, subject to it being done within one year from the relevant date. On the other hand, the demand for duty in relation to extended period is mentioned in the proviso to Section 11A(1). Under that proviso, in cases where excise duty has not been levied or paid or has been short-levied or short-paid or erroneously refunded on account of fraud, collusion or wilful misstatement or suppression of facts, or in contravention of any provision of the Act or Rules with the intent to evade payment of duty, demand can be made within five years from the relevant date. In the present case, we are concerned with the proviso to Section 11A(1). 24. In the case of Cosmic Dye Chemical v. Collector of Central Excise, Bombay [(1995) 6 SCC 117], this Court held that intention to evade duty must be proved for invoking the proviso to Section 11A(1) for extended period of limitation. It has been further held that intent to evade duty is built into the expression "fraud and collusion" but misstatement and suppression is qualified by the preceding word "wilful". Therefore, it is not correct to say that there can be suppression or misstatement of fact, which is not wilful and yet ....
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....on) and the presence of an intention. Thus, invocation of the extended limitation period under the proviso to Section 73(1) does not refer to a scenario where there is a mere omission or mere failure to pay duty or take out a license without the presence of such intention. 28. In the present case, the Revenue argues that appellant wilfully suppressed the value of taxable services and thus did not discharge its liability of paying the Service Tax on same. The contention of the appellant is that the appellant was under a bona fide belief that the appellant was not liable for payment of Service Tax for the Mandap Keeping and Management, Maintenance and Repair Services. The appellant has supported the nonpayment of Service Tax for Mandap Keeper Services by Notification No. 12/2003-S.T. It also states that, during the enquiry itself, it paid Service Tax on the sale of the above-mentioned items for the periods 2004-05 and 200506 with interest and had also started paying Service Tax on these items regularly from April, 2006. The same has been also acknowledged by the DGCEI in the SCN. 29. As regards management, maintenance and repair services the appellant claimed that i....
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...., 2014 (36) STR 271 (Cal.). 13. We find that the contention of the appellant that the demand was wholly barred by limitation has been addressed by the appellate authority in para 14 of the impugned Order in Appeal, as under: "14. As regards the invocation of extended period of limitation and imposition of penalty, it is observed that the appellants had wrongly availed ineligible credit for which they are not entitled. They had not disclosed the details of the cenvat credit taken by them to the department. The wrong availment of Cenvat Credit was detected only during the verification by the department which would have otherwise gone unnoticed. Similarly they had not furnished the details of exemption availed by them in the ST 3 which was also detected only during the audit. Thus, the suppression of fact with intention to evade tax has clearly been established. Further, the arguments of the appellant viz., submitting periodical returns, periodical visits by the Audit wing, DGCE visit in July, 2007 etc., had already been negated after a elaborate discussion in the impugned order vide paras 3.11 to 3.16 and concluded that extended period had rightly been invoked in this cas....
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..... 5 crores and more than Rs. 5 crores are also to be cross checked by the Assistant Commissioner and Additional Commissioner, respectively. (1) Circular No. 249/83/96-CX., dated 11-10-1996 (para 3); (2) Circular No. 311/27/97-CX., dated 15-4-1997 (regarding maintenance of register of scrutiny and reporting progress of scrutiny of ER-1 returns in monthly Technical Report being sent to the Board.) (3) Circular No. 818/15/2005-CX., dated 15-5-2005 issued by C.B.E.& C. under Rule 12(3) of Central Excise Rules, 2002 prescribing two stage scrutiny of ER-1 and ER-3 returns - preliminary scrutiny and detailed scrutiny as per detailed check list prescribed for this purpose. 7.2 From the above Circulars of the C.B.E. & C. regarding scrutiny of ER-1 returns, it is clear that the returns filed by an assessee are required to be subjected to detailed scrutiny in course of which the concerned officer can call for the documents from the assessee wherever necessary for scrutiny. Therefore in this case, if the concerned Range officer/Assistant/Deputy Commissioner or concerned Additional Commissioner had checked the returns, the short payment would have been immedi....
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....mand, if any. Failure to do so cannot be overcome by attributing malafide to the assessee merely because self-assessment was prevailing during the relevant period, as that would run counter to the dictum of the Hon'ble Apex Court in the Uniworth Textiles case, reproduced above. This Tribunal has consistently taken a view that allowing the assessee to self-assess the tax is a mere facility extended to the assessee. That in no way detracts or dilutes the statutory responsibility of the jurisdictional central excise officers to ensure correctness of the assessment, exemptions claimed, cenvat credit taken and availed, and duty payments made. Such a view has been repeatedly expressed as can be seen from the decisions in M/s. Xomox Sanmar Ltd, Unit II v. Commissioner of CGST & Central Excise, reported in 2024 (11) TMI 1418 - CESTAT CHENNAI, Final Order No.40567/2025 dated 30.05.2025 in the case of M/s. Nobel King Purchase Solutions Pvt Ltd v Commissioner of GST and Central Excise and in Final Order No.40664/2025 dated 26.06.2025 in the case of M/s. Exide Industries Ltd v Commissioner of GST & Central Excise. 17. Likewise, we find that in a case where revenue had preferred the appeals ....
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....note similar to Note 4, requiring separate disclosure of the value of deemed export clearances, we do find any merit in the findings of the adjudicating authority that there was suppression of facts as a consequence of assessee's failure to separately disclose the value of deemed export clearances. An accusation of nondisclosure can only be made if there is in the first instance a requirement to disclose." (emphasis supplied) 19. There is a catena of decisions in similar vein wherein, various High Courts as well as this Tribunal, have consistently held that when the assessee is registered and filing returns regularly, the range officer had a duty to scrutinize returns and detect any irregularity and to raise pertinent queries in this regard and that in the light of any negligence or failure to do so, the allegation of suppression by the assessee cannot be countenanced. To cite a few, apart from those cited above, the decisions in Jagadamba Power & Alloys Ltd v CCE, Jaipur, 2025(391) ELT 478 (Chhattisgarh) affirmed in CCE v Jagadamba Power & Alloys Ltd, 2025 (391) ELT 465 (SC), Swastik Engineering v CCE, Bangalore, 2010 (255) ELT 261 (Tri-Bang) upheld in CCE Bangalore II v Swa....
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....tation. Likewise, in CCE, Bangalore v. Pragathi Concrete Products Ltd, 2015 (322) ELT 819 (SC), the Apex Court has held as under "3. It is also found as a matter of fact, that the unit of the respondent was audited during this period several times and there were physical inspections by the Department as well. Therefore, there could not be any case of suppression. We are in agreement with the aforesaid view taken by the CESTAT. As a result, this appeal is dismissed." The decisions in Bharati Televentures Ltd v. CCE, Pune III, 2014 (33)STR 86 (Tri-Mumbai), as well as the decision of the Principal Bench of the Tribunal in Delhi Airport metro Express Pvt Ltd v. CCE & Customs, Rohtak, (2024) 25 Centax 238 (Tri-Del) relied on by the Appellant have also held that when audit has been conducted and the records of the appellant has been examined, in such a situation it is not permissible for the department to take recourse to the extended period of limitation contemplated under the proviso to Section 73(1) of the Act. 21. In view of our aforesaid discussions, the foregone conclusion is that the Appellant has not suppressed facts, much less suppressed facts with an intent to ev....
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....cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside." 24. Consequently, since the Tribunal was justified, as we have held, in coming to the conclusion that the demand was time barred, there was no occasion for the Tribunal to enter upon the merits of the dispute. We, accordingly, answer the question of law as framed by the assessee in the affirmative and in favour of the assessee. 25. The appeal by the assessee shall stand disposed of in the aforesaid terms." (Emphasis supplied) 23. We also find that the Honourable Supreme Court in Commissioner of Customs, Mumbai v B.V. Jewels, 2004 (172) ELT 3 (SC), has observed that " If, in reality, the CEGAT found that the action taken by the departmental authorities was beyond the period of limitation, it ....
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....Agricultural Industries reported in (2009) 5 SCC 121, the Allahabad High Court in Commissioner of Customs, Central Excise & Service Tax v. M/s. Monsanto Manufacturer Pvt. Ltd., reported in 2014-TIOL-550-HC-ALL-ST, answered the question of law in favour of the assessee. 13. Judgment of the Supreme in State Bank of India's case (cited supra), followed in Commissioner of Customs's case (cited supra), squarely applies to the facts on hand, wherein, CESTAT, Madras, while dismissing the appeal as time-barred, has entered into the merits of the case and dismissed the same, on merits. In the words of the Hon'ble Supreme Court, that would be an illegality. 14. Though Mr. A.P. Srinivas, learned counsel appearing for the Revenue submitted that the correctness of the order impugned before us, can be decided in an appeal before the CESTAT and prayed to sustain the order, dated 15-2-2016 in W.P. No. 5501 of 2016, in the light of the above discussion and the decision in State Bank of India's case (cited supra), we are not inclined to accept the said contention. When the Hon'ble Supreme Court has described the manner of disposal of an appeal, as illegality, the same can be correc....