M/S Sidhartha Tubes Ltd vs C.C.E. Indore

[Arising out of Order-In-Appeal No. IND/71/2011 dated 17.02.2011 passed by CCE Indore]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, 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 Sidhartha Tubes Ltd. ...Appellant(s)

Vs.

C.C.E. Indore Respondent(s)

Appearance:

Mr. Bipin Garg (Advocate) for the Appellant

Mr. R K Mishra DR for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing/ Decision. 03.09.2015

Final Order No. 54090 /2015_

Per S K Mohanty:

The brief facts of the case are as follows.

1.1 The appellant is engaged in the manufacture of MS pipes (galvanized) falling under Heading 7306 of the Central Excise Tariff Act, 1985. On scrutiny of records maintained by the appellant for the period 2006-2007, it was detected by the Central Excise Officers that the job work activities undertaken by the appellant are not amounting to manufacture and also not covered under Notification No. 214/86. Therefore, the Department initiated proceedings for recovery of service tax, claiming that the activities are covered under Business Auxiliary Service. During the course of audit, the appellant had deposited the service tax attributable to such service. Subsequently the SCN issued to the appellant seeking recovery of the short paid tax along with interest and also for imposition of penalty.

1.1 The said notice culminated in the adjudication order dated 28.05.2010 wherein service tax demand of Rs. 2,83,728/- was confirmed under Section 73 of the Finance Act, 1994. Besides penalty have also been imposed under Section 76 & 77 of the said Act. Appeal filed against the said order was rejected by the Commissioner (Appeals). Hence, the present appeal is before this Tribunal.

2. Sh. Bipin Garg, the Ld. Advocate appearing for the appellant submits that the proceedings initiated by the Central Excise Department is barred by extended period of limitation. The period involved in the present case is 2006-2007, whereas the SCN has been issued on 16.01.2009, which is beyond the period of one year from the relevant date. He further submits that the proviso contained in sub- section (1) of Section 73 of the Finance Act, 1944 has not been invoked in the SCN dated 16.01.2009. it is his further submission that ingredients mentioned in the proviso to Section 73(1) such as fraud, collusion, willful misstatement, suppression of facts or contravention of the statutory provisions with intent to evade payment of service tax has not been specifically alleged in the SCN. Thus according to the Ld. Advocate, since the ingredients provided in the said statutory provisions have not been specifically alleged in the SCN, the time period for issuance of the same should be confined to one year. In view of the fact that the said notice has been issued beyond the period of one year, it is clearly barred by limitation of time. To justify his above stand, the Ld. Advocate has relied on the judgment in the case of Collector of Central Excise vs HMM Ltd. reported in 1995 (76) ELT 497 (S.C.), Larsen & Turbo Ltd. vs CCE Pune-II reported in 2007 (211) ELT 513 (S.C.) and also the judgment of Honble Delhi High Court in the case of S. Jain vs UOI reported in 2002 (144) ELT 262 (Del.).

3. Per contra, Sh. R K Mishra the Ld. DR appearing for the Revenue respondent reiterates the findings recorded in the impugned order and submits that confirmation of service tax demand is not hit by bar of limitation.

4. I have heard the Ld. Counsel for both the sides and perused the records.

5. It is revealed from the records that the SCN dated 16.01.2009 has been issued, seeking recovery of service tax for the period of April 2006 to March 2007, which is beyond the period of one year. No specific allegations have been made in the SCN, justifying invocation of the proviso contained in section 73(1) of the Finance Act, 1994. Therefore, I am in agreement with the submissions of the Ld. Advocate that the SCN is barred by limitation. The service tax demand confirmed in the Adjudication order and upheld in the impugned order is not justified. I find that the judgments cited by the Ld. Advocate are squarely applicable to the facts of the present case. The principles decided by the judicial forum with regard to limitation, is that the extended period of limitation entails both civil and criminal consequences and, therefore, must be specifically stated in the show cause notice, in absence whereof, the court would be entitled to raise an interference.

6. In view of the settled position of law that in absence of any specific allegation, alleging suppression, willful misstatement, fraud etc, the demand cannot be sustained beyond the period of one year. Therefore, the appeal should be allowed in favour of the appellant on the ground of limitation. The impugned order is set aside. The appeal is allowed in favour of the appellant with consequential relief, if any, as per law.

(Dictated and pronounced in open court)

(S. K. Mohanty)

Member(Judicial)

Neha

4 | Page

ST/815/2011-[SM]