M/S. Indian Oil Corporation Limited vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-PJ-394-395-VDR-I-2012-13 dated 23.01.2013, passed by Commissioner (Appeals) Central Excise, & S.T., Vadodara)

M/s. Indian Oil Corporation Limited : Appellant (s)

VERSUS

Commissioner of Central Excise & S.T., Vadodara : Respondent (s)

Represented by :

For Appellant (s) : Shri Willingdon Christian, Advocate For Respondent (s) : Shri Gonind Jha, Authorised Representative

For approval and signature :

Mr. H.K. Thakur, Honble Member (Technical)

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

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

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

Yes

CORAM :

Mr. H.K. Thakur, Honble Member (Technical)

Date of Hearing / Decision : 30.06.2015

ORDER No. A/10920/2015 Dated 30.06.2015

Per : Mr. H.K. Thakur;

This appeal has been filed by the appellant with respect to OIA No. PJ-394-395-VDR-I-2012-13 dated 23.01.2013 under which CENVAT credit disallowed by the adjudicating authority has been upheld.

2. Shri Willingdon Christian, (Advocate) appearing on behalf of the appellant argued that two OIOs were passed by the adjudicating authority denying CENVAT credit where the issues involved are different. It was his case that the present appeal is continuation of OIO No. 24/IOCL/D-IV/VDR-IV/11.82 dated 19.7.2011 which has been decided by a common OIA dated 23.01.2013. Learned Advocate argued that issue involved in the present appeal is admissibility of CENVAT credit of service tax paid on Study and Designing of Storm Water drainage development. That these services were utilised in relation to installation of Pipelines and appellant was under bonafide belief that such CENVAT credit was admissible. Learned Advocate further argued that when appellant was holding a bonafide belief then extended period can not be invoked as the CENVAT credit taken during the relevant period were periodically shown in the Central Excise returns filed with the department. That in case the Central Excise officers had any doubt, they were free to enquire from appellant the details of the services received. He relied upon the following case laws:-

(a) CCE, Jaipur vs. Pushp Enterprises  [2011 (22) STR 299 (Tri. Del.)]

(b) CCE, Indore vs. Medicaps Limited  [2011 (24) STR 572 (Tri. Del.)]

3. Shri Govind Jha (AR) appearing on behalf of the Revenue argued that under the provisions of Rule 9(6) of the Cenvat Credit Rules, it was the responsibility of the appellant to ascertain the admissibility of CENVAT credit on the services availed. Learned AR, therefore, strongly defended invocation of extended period in this case as recorded by the first appellate authority in Para 5.7 of OIA dated 23.01.2013.

4. Herd both sides and perused the case records. The limited issue raised by the learned Advocate on behalf of the appellant is that there was no suppression of fact with intention to evade payment of duty or taking wrong credit, therefore, extended period is not applicable. He relied upon the case law of CCE, Jaipur vs. Pushp Enterprises (supra). Para 9 and 10 of this case are reproduced below:-

9.?From perusal of the proviso to Section 11A(1) and Section 11AC, it is clear that the criteria for invoking extended period of limitation under proviso to Section 11A(1) is identical to the criteria for imposition of penalty under Section 11AC. The Honble Supreme Court in the case of Padmini Products (supra) with regard to the proviso to Section 11A(1) has held that mere failure or negligence on the part of the manufacturer either to take out a licence or to pay duty in case where there was scope for doubt, does not attract the extended limitation period, unless there is evidence that the manufacturer knew that goods were liable to duty or he was required to take out a licence and, therefore, mere failure to pay the duty or take out the licence is not enough to invoke these proviso. Same view has been taken by the Apex Court in the case of Collector of Central Excise vs. H.M.M. Limited (supra) and Collector of Central Excise, Bangalore vs. Karnataka Agro Chemicals (supra).

10.?In these cases, there is no dispute about the fact that the ER-I Returns had disclosed the availment of Cenvat Credit but since there is no requirement for enclosing the invoices or giving the details of such credit or neither such details were given nor the invoices were enclosed. However, once ER-I Return is filed, even though it is filed under self-assessment system, the officers are supposed to scrutinize the same. Just because the respondent had taken Cenvat credit in respect of certain input services, which according to the Department was not admissible to them, it cannot be concluded that the credit had been taken knowing very well that the same was not admissible, unless there is some evidence in this regard. Moreover when the quantum of service tax credit availed had been disclosed, the officers were always free to inquire from the respondent about details of the same and satisfy themselves about its correctness. In view of these circumstances, I am of the view that there is no infirmity in the impugned order. Revenues appeal is dismissed.

5. It is observed from the above case laws that CESTAT Delhi, after relying upon the Apex Court decision in the case of Padmini Products vs. CCE  [1989 (43) ELT 195 (SC)], held that for invocation of extended period there has to be some evidence that an assessee knew that they were liable to pay duty. That mere failure to pay duty or taking license is not enough to invoke extended period. The ratio laid down by the Apex Court was followed in Para 10 of the above case law by holding that when CENVAT credit is reflected in periodical returns then extended period can not be invoked. A perusal of the records of this appeal reveals that the factual matrix is similar to the facts available before the CESTAT, New Delhi in the case of CCE, Jaipur vs. Pushp Enterprises. Accordingly, it is held that extended period is not invokable in the present appeal and appeal filed by the appellant is required to be allowed on time-bar.

6. Appeal filed by the appellant is allowed.

(Order dictated and pronounced in the Court)

(H.K. Thakur) Member (Technical) .KL

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