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M/s. Delhi Airport Metro Pvt. Ltd. Versus Commissioner, Service Tax, Rohtak

2015 (4) TMI 289 - PUNJAB & HARYANA HIGH COURT

Challenge to the show cause notice - CENVAT Credit - summarization of the credits taken on capital goods - petitioner had not provided any details in respect of the usage of certain goods and also did not supply sample copies of invoices of such goods - Availability of alternate remedy - Held that:- Commissioner has held that the petitioner has suppressed material with an intent to evade payment of duty. The petitioner contends that the fact of having availed of CENVAT duty was disclosed in the .....

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sary to ascertain whether there were other relevant facts which were necessary to be disclosed and whether the non-disclosure thereof constituted suppression. It is obviously for this reason that the petitioner rightly did not challenge the show cause notice itself at the outset. The petitioner rightly answered the show cause notice by filing a detailed reply therein. Even on merits, the petitioner thereafter appeared before the Commissioner and made detailed submissions. The petitioner filed de .....

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ttacharyya, Senior Advocate with Mr. Sushil Verma and Mr. Lakhindar Bir Singh, JUDGMENT S.J. Vazifdar, Acting Chief Justice: The petitioner has challenged a show cause notice dated 20.7.2012 (Annexure P-10) and an order dated 12.12.2014 (Annexure P-13) passed by the Commissioner, Central Excise. 2. In the facts and circumstances of this case, we see no reason to interfere either with the show cause notice or with the order of the Commissioner in this writ petition. The petitioner has already rig .....

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te remedy of challenging the show cause notice before the Commissioner. 3. The petitioner is registered with the Service Tax Department for Works Contract Service falling under Section 65(105)(zzzza) of the Finance Act, 1994. Subsequently, it obtained the inclusion in its registration certificate of consulting engineers services and transport of goods by road services under Section 65(105)(g) and (zzp), respectively, of the Finance Act. 4. The petitioner entered into a concession contract dated .....

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andably a detailed, lengthy and an involved agreement. It is not necessary to refer to the agreement in detail. It is sufficient to note that the source of revenue for the petitioner consisted of fare revenue and non-fare revenue. 5. Correspondence ensued between the parties in the course of which the petitioner was informed that the accumulated CENVAT Credit of ₹ 28.61 crores as per its ST-3 returns for the period October, 2009 to March, 2010 was in contravention of CENVAT Credit Rules, 2 .....

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capital goods and inputs on which CENVAT credit had been availed. It was also requested to clarify as to how capital goods and inputs, on which it had availed CENVAT credit, were covered under the relevant CENVAT credit rules. The petitioner was also requested to submit input invoices/agreements with suppliers of goods on which CENVAT credit had been availed by it. 7. It is pertinent to note that the petitioner, in the course of the correspondence, stated that while finalizing the revised ST-3 .....

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hat on scrutiny of the revised ST returns for the said period, it was found that the petitioner had availed CENVAT credit amounting to over ₹ 65,01,43,929/- which included an amount of ₹ 63,12,07,705 as service tax and central excise duty and ₹ 1,26,24,150/- and ₹ 63,12,074/- as education cess and secondary & higher education cess, respectively. The show cause notice summarised the credits taken on capital goods, inputs and input services derived from the ST-3 returns .....

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ed that the said amount of about ₹ 65 crores along with interest was liable to be recovered under Section 73 of the Act read with rule 14. The show cause notice further stated that it appeared that the petitioner had intentionally and wilfully suppressed the fact of availing the allegedly inadmissible CENVAT credit and that the same were, therefore, liable to be denied and recovered within five years from the relevant date under Section 73 of the Act. The petitioner was, therefore, called .....

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eared before the Commissioner and argued the matter on merits. Detailed written submissions were furnished including on the issue as to whether there was suppression on the petitioner s part or not. The petitioner also contended that there was no jurisdiction to issue the show cause notice as it was issued beyond the period prescribed under Section 73 of the Finance Act. 10. The only point argued before us is that the show cause notice was issued beyond the time prescribed in Section 73(1) and t .....

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has been shortlevied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: PROVIDED that where any service tax has not been levied or paid or has been short-levied or short-paid erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made ther .....

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ip; …… (2A) Where any appellate authority or tribunal or court concludes that the notice issued under the proviso to sub-section(1) is not sustainable for the reason that the charge of,- (a) fraud; or (b) collusion; or (c) willful misstatement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or the rules made thereunder with intent to evade payment of service tax, has not been established against the person chargeable with the service tax, .....

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ted 15.12.2014 which, inter alia, stated that an appeal may be filed against the same under the Central Excise Tax (Appeal) Rules, 2001, Regulation 35B(6) of the Central Excise Tax (Appeal) Regulations, 1944, Rule 6 of Customs Duty (Appeal) Rules, 1982, Regulation 129A of the Customs Regulations, 1962 and Rule 9 of the Service Tax Rules, 1994 whichever was applicable. The impugned order deals in considerable detail with the facts of the case, the contentions of the parties and the record. It has .....

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er also dealt with the contention in the reply to the show cause notice that the show cause notice was time-barred and that the provisions of Section 73(1) were inapplicable in the facts and circumstances of the case to extend the period of limitation. The Commissioner held, relying upon legal dictionaries, that where there is an obligation to speak, a failure to speak will constitute suppression of fact. He held that the petitioner had an obligation to comply with the statutory provisions and t .....

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t is also important to note that the petitioner had admitted that it had allegedly inadvertently not mentioned that it had claimed CENVAT credit in respect of capital goods to the extent of ₹ 18.27 crores and that it had inadvertently shown the same under the category of input in its returns. Whether it was an inadvertent error or not is not a question of law. It is a question of fact and, in any event, at least a mixed question of law and of fact. Similarly, as we mentioned earlier, the S .....

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vant rules. Further, some of the observations in the show cause notice and the findings in the impugned order were based on the scrutiny of the revised ST returns for the said period. Moreover, no replies had been received to the respondent s queries as to how the capital goods and inputs, in respect whereof the CENVAT credit was taken, fall within the definition of capital goods and inputs under the said Rules. Nor were details provided in respect of usage of said goods. The sample copies of th .....

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e first instance and had accepted the jurisdiction of the authorities at that point of time. 13. Mr. Bhattacharyya, the learned senior counsel appearing on behalf of the petitioner submitted that he would confine this petition only on the ground of jurisdiction and would not contest the merits of the matter. 14. We find, however, that even the issue as to whether the relevant material was suppressed or not is not a pure question of law. By the impugned order, the Commissioner has held that the p .....

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of fact which would be required to be considered. Even assuming that there was a disclosure of the fact of the petitioner having availed the credit, it would be necessary to ascertain whether there were other relevant facts which were necessary to be disclosed and whether the non-disclosure thereof constituted suppression. It is obviously for this reason that the petitioner rightly did not challenge the show cause notice itself at the outset. The petitioner rightly answered the show cause notic .....

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l. The Tribunal held in favour of the respondent. The Supreme Court upheld the decision of the Tribunal and found that the department could not establish that there was any suppression of fact or fraud on the part of the respondent-assessee. 16. The judgment of the Supreme Court in Commissioner, Central Excise, Meerut vs. M/s Monsanto Manufacture Pvt. Ltd., (2011) 2 SCC 754 is also of no assistance to the petitioner. In that matter also, the assessee had availed of all the remedies including bef .....

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