TMI Blog2016 (9) TMI 1108X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and therefore, there is no justification on the part of the petitioner to bye-pass the Appeal remedy, more particularly, on the only ground raised by the petitioner before this Court which is purely a question of fact. Nevertheless, this Court examined the Order-in-Original as to whether any finding has been recorded in this regard. It is not in dispute that the basis of the show-cause notice was set-out in the impugned order that deliberately the petitioner did not disclose the fact of availment of Input Service Credit of exempted service. The record of the proceedings show that the second respondent has discussed the matter pertaining to the transaction done by the assessee and it cannot be disputed by the petitioner that the entire proceedings was on account of the investigation taken up by the SIT of the respondent Department. In the case on hand there is no allegation of fraud or collusion and the case against the petitioner is brought under Clause (c) to (e) in the proviso under Section 73(1), viz., wilful misstatement, suppression of facts, contravention of the provisions with intent to evade payment of service tax. To ascertain as to whether there was wilful mis- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd respondent while passing the Order-in-Original, dated 18.11.2013 has not rendered any findings as to the aspect as to why the extended period of limitation is invocable in the instant case. 5. Firstly, it has to be pointed out that the question of limitation in these matters, especially, in Central Excise and Service Tax matters is not essentially a pure question of law, but a mixed question of fact and law. Therefore, question whether extended period of limitation could be invoked or not is essentially a question of fact. The contention raised by the petitioner is that in the absence of specific and explicit averments about suppression of facts, the larger period of limitation cannot be invoked in the facts of the case and as there is no finding rendered to the said effect, both the Order-in-Original and Order-in-Appeal they are liable to be set-aside. 6. The petitioner/assessee is registered with the service tax Commissionerate for taxable service of construction of complex services on 01.01.2007 and included works contract service on 09.07.2007 and further amended to include business auxiliary services and input service distribution on 06.05.2008. The petitioner is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to his overseas agent towards his market promotional activity abroad which is determined on the foreign inward remittances. The assessee is not entitled to avail input credit on the provisions of non taxable service rendered under CCS / WCS i.e., Service Tax amount due on commission paid to the agent in respect of foreign inward remittances received towards projects having less than 12 residential units is ineligible. The assessee is availing input credit on the non-taxable service as corporate overhead and distributes the credit so availed to their office at Chennai and branches in Kerala. Upon verification of the agreement entered into between the petitioner and the overseas purchasers dated 01.06.2007 and 22.05.2008, it was stated that the oversees agent at Dubai is marketing building project developed by the assessee in India, the principal pays commission go upto 20% subject to a maximum of US $ 25,000 per transaction on all foreign inward remittances out of the sale generated by them. 8. The second respondent to justify their action in invoking extended period of limitation mentioned the following in the Show-Cause notice:- 5.1. Whereas it appears from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appeal remedy, more particularly, on the only ground raised by the petitioner before this Court which is purely a question of fact. Nevertheless, this Court examined the Order-in-Original as to whether any finding has been recorded in this regard. It is not in dispute that the basis of the show-cause notice was set-out in the impugned order that deliberately the petitioner did not disclose the fact of availment of Input Service Credit of exempted service. The record of the proceedings show that the second respondent has discussed the matter pertaining to the transaction done by the assessee and it cannot be disputed by the petitioner that the entire proceedings was on account of the investigation taken up by the SIT of the respondent Department. 12. Though option was given to the learned counsel for the petitioner to advise his client to pursue the remedy before the CESTAT, the learned counsel invited an order on merits of the contention raised. As mentioned above the only reason assigned by the petitioner to bypass the appellate remedy is by contending that there is no specific finding rendered in the impugned order justifying invocation of the extended period of limitation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to evade payment of service tax. On perusal of the show cause notice, dated 14.09.2012, the allegation against the petitioner which emerges upon investigation by the Special Investigation Team, verification of the records and documents produced by the petitioner and the statement given by the Assistant General Manager of the petitioner on 10.04.2012, is that they deliberately did not disclose the fact of availment of input services credit on exempted services either in the ST3 Returns or in any other manner to the Department. But for the investigation by the SIT the wrong availment of Cenvat Credit would not have come to light and these facts would disclose that the petitioner did not disclose the facts with intention to avail ineligible Cenvat Credit and to evade payment of service tax, by not disclosing the actual value of the taxable service provided under works contract service by inflating the land value resulting in short payment of service tax. This appears to be the basis for invoking the extended period under the proviso to Section 73(1) read with Rule 14 of Cenvat Credit Rules, 2004. For the above allegations, the reply by the petitioner as found in their letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee paid service tax on the commission amount paid to their overseas agent under Business Auxiliary Service (Import of Service) and have subsequently availed input credit on the same. Further as input service distributor they had distributed the input credit to their branches in Chennai Kerala. On verification it was found that the assessee had wrongly availed input credit paid under BAS (on less than 12 residential dwelling units) being the non taxable output service rendered under CCS/WCS. It was noticed that the assessee have availed in-eligible input credit on the commission paid to overseas agent under reverse charge mechanism and have distributed the same to their branches in Chennai and Kerala. Annexure II of the SCN indicated the breakup of input credit written off on 31.03.2010 as well as the details of Input Service Distributor (ISD) return for the period 2009-10. Further vide their letter dated 07.03.2012 the assessee had stated that the unadjusted Cenvat Credit of ₹ 97,190/- has been written off in their book of accounts on 31.03.2010 have been erroneously shown in their ST-3 return as closing balance of Cenvat Credit available for distribution which wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the respective period. Further, the appellants had not quantified any differential amount towards their claim. Therefore, the appellant's plea does not require any consideration. 7. As regards the imposition of penalty under Section 78, it is observed that the appellants had taken the wrong credit for which they are not entitled. Such wrong availment of cenvat credit had not been in the knowledge of the Department. This was identified only during the investigation by the SIR wing of the Department which would have otherwise gone unnoticed. Thus, the appellants had contravened relevant provisions of Act and Rules in order to avail the undue benefit and therefore, as a sequel, they are liable for penal action as provided under the relevant provisions of Act and Rules. 19. In Uniworth Textiles Ltd. Vs. Commissioner of Central Excise, Raipur, [2013 (288) E.L.T. 161 (SC)] while construing the proviso under Section 28(1) of the Customs Act, which is in pari materia with the proviso under Section 73(1) of the Act, the Hon'ble Supreme Court observed:- 12. .... In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties ..... 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