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2016 (7) TMI 896 - CESTAT NEW DELHI

2016 (7) TMI 896 - CESTAT NEW DELHI - TMI - Extended period of limitation - Suppression of facts - Demand based on subsequent department audit - Cenvat Credit - input services - credit of service tax availed on construction service of staff quarters, school building and hospital building during 2008-09 to 2010-2011 - Nexus with manufacturing activity - Held that:- Even if it is so, if the appellant take credit, which is disputable, that by itself, will not form basis for invoking fraud, etc. Fur .....

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available in the records, the question of their being pointed out by the audit does not arise. Further, ld. Commissioner (Appeals) examined the question of time bar with reference to time period between the knowledge of the department and issue of demand and held that knowledge of the department is not relevant to decide the relevant date. As mentioned earlier, the demand for the period 2008-2009 to 2010-2011 has been issued on 10.12.2012.On this basic fact, which is not disputed, the time bar .....

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I B. RAVICHANDRAN, MEMBER (TECHNICAL) Rep. by Ms. Sukriti Das, Advocate for the appellant. Rep. by Shri G.R. Singh, AR for the respondent. ORDER Per B. Ravichandran: The appellants are engaged in the manufacture of Aluminium and are registered with the central excise department. They are availing cenvat credit on various inputs and services in terms of Cenvat Credit Rules, 2004. Consequent upon audit of the accounts of the appellant, proceedings were initiated against them to deny and recover ce .....

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service tax credit on all these transactions. However, ld. Counsel raised strong objection against the impugned order on the ground that the whole demand is hit by time bar in terms of Section 11 A of the Central Excise Act,1944. The period involved is 2008-2009 to 2010-2011, whereas the show cause notice was issued on 10.12.2012 which is clearly beyond the normal period. Neither the show cause notice nor the original order nor the appellate order gave any justifiable reason for invoking extend .....

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audit. They have maintained all the records as per the requirement of Cenvt Credit Rules and no material fact has been either mis-stated or suppressed from the authorities. Ld. Counsel strongly pleaded that the demand will not stand in view of the clear violation of time limit in terms of Section 11 A. 3. Ld. AR reiterated the findings of the Lower Authorities. He submitted that the credits on all these construction activities are not available to the appellants and they have taken deliberately .....

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vat credit register along with such returns. The present proceedings were consequent upon audit of their accounts conducted by the officers. It is also a fact that the appellants were earlier issued with a show cause notice on 11.03.2011 based on a Special Audit Report conducted under Section 14 AA of the Central Excise Act, 1944 regarding inadmissible credit of service tax with reference to maintenance of hospitals, directors bungalow, club, etc. Though the said notice was not on construction .....

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ed on 10.12.2012 covering the period of 2008-2009 to 2010-2011. These facts show that repeat audit including special audit has been conducted on the accounts of the appellants. The alleged inadmissible credits were pointed out based on the regular records maintained by the appellants. To invoke extended period of demand in terms of Section 11 A, the department is to adduce evidence of elements of fraud or collusion or any willful mis-statement or suppression of facts or contravention of any of t .....

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ble, have availed cenvat credit with intent to inflate their accounts and subsequently to debit the duty amount improperly from this inflated cenvat credit and thereby, evaded payment of central excise duty. The notice failed to substantiate the grounds on which the extended period of demand was issued. The appellants are claiming eligibility for these credits. The question of their having knowledge of such credit, being not admissible, has not been substantiated. Even if it is so, if the appell .....

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the impugned order, the Commissioner (Appeals) recorded his finding regarding time bar and in para-6 and 7 of the order. He recorded that though the appellant have claimed to have filed statutory returns with cenvat credit details, they have not disclosed the cenvat credit availed on staff quarters, school buildings and hospital buildings. It is not clear on what basis such finding has been recorded. The credits taken by the appellants were reflected in the statutory records. If such credits we .....

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