The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that an extended period of limitation cannot be invoked in absence of suppression of fact with tax evasion intention.
The bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that mere suppression of facts is not sufficient, but there must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the appellant, the extended period of limitation cannot be invoked.
The appellant/assessee was engaged in construction services, which included Commercial or Industrial Buildings and Civil Structures, Construction Services, Construction of Residential Complexes and Maintenance & Repairs Services, Commissioning and Installation, Preferential Location or External/Internal Development of Complexes under the provisions of Finance Act, 1994.
During the relevant period, the appellant availed the abatement under Notification No. 1/2006 dated 01.03.2006 as amended by Notification No. 29/2010. An audit of the Appellant’s records was conducted for the period of 2010-2011 & 2011-2012 the department noted that for the period 2010-2011, the appellant had availed the abatement under Notification No. 1/2006 Service Tax dated 01.03.2006, and simultaneously availed CENVAT Credit of Service tax on input services used for providing such taxable services.
The Department observed that for the period 2011-2012, the appellant had wrongly availed the CENVAT Credit of Rs. 50,32,761/- with respect to Commercial or industrial construction & Construction of complex service.
The department opined that for the period 2011- 2012, the Appellant was engaged in providing taxable as well as exempted services, and as per the provisions of CENVAT Credit Rules, 2004, the Appellant was eligible to avail Credit only in respect of taxable services. Further, the appellant had not maintained separate accounts for taxable services & exempted services as required under Rule 6(3) of the CENVAT Credit Rules.
Therefore, a show cause notice dated 11.12.2013 under Section 73(1) was issued to the Appellant proposing to recover the amount of Rs. 1,21,32,851, claimed as abatement by the Appellant for the period 2010-2011. The Adjudicating Authority vide the adjudication order dated 02.03.2017, appropriated the demand of Rs. 50,32,761/- already deposited by the Appellant and confirmed the demand of Rs. 1,21,32,851/- along with imposition of penalty and interest.
The appellant filed an appeal before the Commissioner (Appeals), who upheld the order.
The CESTAT held that suppression of facts has to be “wilful‟ and it has to be established that there was also an intent to evade payment of service tax.
Case Details
Case Title: Imperia Structure Limited Versus Commissioner of Central Goods, Service Tax and Central Excise
Case No.: Service Tax Appeal No. 50719 of 2018
Date: 16.04.2025
Counsel For Appellant: Atul Gupta, Shri Varun Gaba
Counsel For Respondent: Rajeev Kapoor
