The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that details of suppression of facts only in Show Cause Notice (SCN), limitation period cannot be invoked.
The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that extended period of limitation was invoked only on the ground that the appellant, by way of willful mis-statement and wrong availment of the said notification by way of mis-representation of facts, which came to the knowledge only during the audit, invoked extended period of limitation.
The bench stated that extended period of limitation cannot be invoked unless one of the five elements necessary to invoke it viz., fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty is established. In this case there are no details, let alone evidence in the SCN, of either willful mis-statement or mis-representation of facts.
The appellant/assessee is registered with the central excise department and manufactured and supplied parts of Turbine falling under Central Excise Tariff Item 8503 00 10 as a sub- contractor of the main contractor M/s BHEL. It availed benefit of exemption Notification which was available for supplies to mega power projects against International Competitive Bidding.
During the internal audit of the records, the audit team came to the conclusion that the appellant was not entitled to the benefit of the exemption notification and accordingly a show cause notice3 dated 01.04.2015 was issued by the Assistant Commissioner covering the period June 2010 to October 2010 invoking extended period of limitation.
It was proposed in the SCN to deny the benefit of the exemption notification and recover central excise duty along with interest and also to impose an equal amount as penalty.
The Assistant Commissioner, relying on this Tribunal’s Final order No. A/51682 of 2015 – EX (DB) dated 06.05.2015 in the case of M/s BHEL Ranipur Haridwar in which the exemption was allowed, dropped the proceedings in pursuance to the SCN.
On appeal, the Commissioner (Appeals) reversed the decision of the Assistant Commissioner holding that the CESTAT’s order was on the issue of reversal of Cenvat credit, whereas in this case the issue related to alleged non-payment of duty on the goods.
The tribunal held that there was no ground to invoke extended period of limitation. The entire period of demand from June 2010 to October 2010 was beyond the normal period of limitation and was time-barred.
Case Details
Case Title: M/s Shape Engineering Co. (P) Ltd. Versus Commissioner (Appeals – I), Customs, Central Excise & Service Tax
Case No.: EXCISE APPEAL NO. 53504 OF 2018
Date: 07.02.2025
Counsel For Appellant: None
Counsel For Respondent: Rakesh Agarwal
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