The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand imposed on the industrial construction service on the ground of Limitation.
Interarch Building Products Pvt. Ltd, the appellant assessee had centralized registration under the Finance Act under ‘commercial or industrial construction services’ and ‘construction services’ and entered into contracts with consumers for execution of contracts in respect of pre-engineered or prefabricated buildings/structures and paid service tax on the gross amount of the contract under the category ‘commercial or industrial constructions service’ made taxable under section 65 (105)(zzq) of the Finance Act 1994.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demands raised and for rejecting the availability of CENVAT credit and directed for its recovery.
V. Raghuraman, the counsel for the assessee contended that the the first show cause notice covered the demand for the period June 2007 to March 2012, and the normal period for issuing the notice at the relevant time was one year. Thus the notice that was issued invoked the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act,1994.
Santhosh Kumar, the counsel for the department relied on the lower authorities and contended that the extended period of limitation was rightly invoked by the department and the demand raised was as per the law and liable to be sustained.
The Bench observed that the allegation of willful suppression of facts with an intent to evade the payment of tax by availing wrongful CENVAT credit was not correct and the invocation of the extended period of limitation for denial of CENVAT credit could not have been resorted to under the proviso to section 73(1) of the Finance Act. The two-member bench comprising Dilip Gupta (President) and Hemambika Priya (Technical) quashed the service tax demand while allowing the appeal filed by the assessee.
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