M/S. Dynamic Motors vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. CHD-EXCUS-000-APP-132-13-14 dated 30/8/2013 passed by Commissioner of Central Excise (Appeals) Chandigarh I]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Dynamic Motors Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Chandigarh I

Appearance:

Shri T R Rastogi, Advocate for the Appellants

Shri V P Batra, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 28.04.2015

FINAL ORDER NO. A/ 51637/2015-(SM)

Per Ashok Jindal :

The appellants is in appeal against the impugned order wherein Cenvat credit was denied to the appellant on the premise that appellant is not entitled to input service credit as they are providing taxable as well as non taxable output service.

2. The facts of the case are that the appellant is an authorised dealer of M/s. General Motors and also authorised for the services at service station. Appellant is paying service tax. There is no dispute. As being authorised dealer of General Motors, appellant is engaged in the activity of trading of vehicles and trading activity of vehicle is an exempted service. Therefore, appellant is not entitled to take Cenvat credit on input service availed by them during the period from October, 2005 to March, 2009 as the appellant is providing taxable as well as non taxable service and not maintaining separate accounts for trading activity. In these set of facts, a show cause notice was issued to the appellant on 20.4.2011 by invoking the extended period of limitation as the appellant has suppressed the fact that they are authorised dealer of M/s. General Motors to deny Cenvat credit on inputs service availed by them along with interest and proposal of penalty was also made. Both the lower authorities confirmed the demand of service tax along with interest and also imposed penalty equivalent to the amount of service tax on the appellant. Against the said order appellant is before me.

3. Learned Counsel for the appellant submits that the show cause notice has been issued by invoking the extended period of limitation which is not sustainable as the issue whether the trading activity is exempted service or not was decided by this Tribunal in the case of Orion Appliances Ltd. [ 2010 (19) STR 205 (Tri-Ahmd)] on 7.5.2010 and it was held by this Tribunal that trading activity not an exempted service and credit of input service attributable to trading activity was not admissible. He further submits that in 2009 on 4.12.2009 this Tribunal in the case of BHEL-GE Turbine Service Pvt. Ltd. vs. CCE, Hyderbad [2010 (19) STR 909 (Tri-Bang)] has granted waiver of pre-deposit on the premise that trading of sale of parts undertaken during the impugned order and amount of Cenvat credit pertained to trading activity has been reversed by the appellant and same is sufficient. He further submitted that in 2010 also this Tribunal in the case of Mann and Hummel Filters Pvt. Ltd. vs. CCE Bangalore in stay application No. E/stay/22181/2014 vide order dated 3.12.2014 held that trading is not exempted service. Therefore, wrong availment of Cenvat credit by the appellant with intention to evade tax is not attributable. Therefore, he prayed that in these circumstances, extended period of limitation is not invokable.

4. He further draw my attention to letter issued by the Superintendent of Central Excise Range I Chandigarh dated 6.12.2006 wherein it was in the knowledge of department that appellant is registered dealer of General Motors for selling the vehicles. Same has been confirmed again by letter dated 9.1.2007 to Superintendent (Service Tax) Vadodara by Superintendent of Central Excise Chandigarh. He also referred to the decision of this Tribunal in their own case wherein vide order dated 4.11.2011, this Tribunal has recorded the fact that appellant is a registered dealer of General Motors. Therefore, extended period of limitation is not invokable.

5. On the other hand, learned AR submits that appellant is not contesting the issue of limitation.

6. Heard the parties. Considered the submissions.

7. The appellant is contesting the issue only on limitation not on merits. The allegation in the show cause notice is that appellant has suppressed the fact that appellant is an authorized dealer of General Motors. Infact the fact has been recorded by this Tribunal in order passed by this Tribunal in appellants own case vide order dated 4.11.11 reported in [2011-TIOL-1876-CESTAT-DEL] wherein it has been recorded that appellant is an authorised dealer of vehicle manufactured by M/s. General Motors. This observation has been made by this Tribunal on 4.11.2011 in appeal which has been arisen out of order in original dated 28.12.10 which means that before 2010, it was in the knowledge of department that appellant who is an authorised dealer of M/s. General Motors for selling the vehicle. Therefore, allegation against the appellant that they have suppressed the fact that they are authorized dealer of General Motors is not correct. Admittedly, show cause notice was issued by invoking the extended period of limitation. In these circumstances, show cause notice cannot be issued to the appellant by invoking the extended period of limitation. Therefore, the demand in the impugned order has been confirmed by invoking the extended period of limitation which is not sustainable. Consequently, impugned order is set aside. Appeal is allowed with consequential relief, if any.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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