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2022 (6) TMI 915 - AT - Service TaxPenalty - Suppression of facts or not - Extend period of limitation - Service tax paid on Reverse Charge Mechanism and credit was availed even after issuance of SCN - whether the Ld. Adjudicating Authority was correct in invoking section 80 of the Finance Act, 1994 to drop the penalty as proposed in the SCN for delay in payment of service tax? - HELD THAT:- The present issue involved in this appeal is no more resintegra in view of the decision of the Tribunal in the case of M/S BHORUKA ALUMINIUM LIMITED. VERSUS THE COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, MYSORE [2016 (11) TMI 1292 - CESTAT BANGALORE] where it was held that Except mere allegation of suppression, the Department did not bring any material on record to prove that there was suppression and concealment of facts to evade payment of tax. Consequently, in my opinion, the imposition of penalty under Section 78 of the Act is not justified and bad in law. The Commissioner should have dropped the demand for the extended period of limitation in view of our finding in this case that there was no suppression of facts. However, the confirmation of demand has not been assailed by the respondent, possibly because it was entitled to the CENVAT credit of whatever service tax it paid. Hence, we cannot modify the impugned order with respect to the confirmation of the demand. Thus, invoking section 80 to waive the penalties was correct and invoking extended period of limitation for confirmation of demand was not. In the case of Mahindra & Mahindra, a larger bench of Supreme Court clarified the position of law regarding invocation of larger period of limitation alleging suppression of facts in cases where there is revenue neutrality. It would be essential to examine the background. In the case of AMCO BATTERIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BANGALORE [2003 (2) TMI 66 - SUPREME COURT] the charge of suppression of facts was dismissed on the ground of Revenue neutrality. A question may arise that if it is found that the elements necessary to invoke extended period of limitation were not available and therefore, Revenue could not have demanded duty for an extended period, can the respondent seek refund of the service tax so paid voluntarily by it? It cannot, for the reason the charge of service tax is not under section 73 but is under the charging sections (whether under forward charge or under reverse charge). There is no limitation on the charge of the service tax and it does not extinguish with the efflux of time. Only the remedy available to the department to recover the service tax not paid is enabled and also limited by section 73. If the charge is proven or is uncontested, and the assessee pays the tax, though it is beyond the limitation, it cannot seek refund of the service tax so paid. It is like a time-barred debt. As we have found that even extended period of limitation could not have been invoked in the factual matrix of this case, we find nothing inconsistent wrong in the Commissioner invoking section 80 to waive the penalties. We fully endorse the views expressed by the Commissioner that there were reasonable causes for failure of the respondent not paying service tax. Appeal dismissed - decided against Revenue.
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