Extended Limitation not Applicable without Intent to Evade Duty at Time of Clearance: CESTAT [Read Order]

The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT)held that the extended limitation period was not applicable in the absence of intent to evade duty at the time of clearance.

Sunrise Containers Ltd,appellant-assessee, cleared fire-damaged capital goods from its unit in August 2012, based on transaction value. The clearance was properly recorded in the books of account and reported to the department through the ER-1 return, with the applicable duty duly paid.

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The department later invoked the extended period of limitation, claiming that the appellant had withheld additional information sought through various correspondences after the clearance. As a result, a show cause notice was issued on November 17, 2016, which the department asserted was valid even under the extended period.

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The assessee's counsel argued that the show cause notice, issued nearly four years after the August 2012 clearance, was time-barred. It was claimed that the Commissioner (Appeals) overlooked the lack of intent to evade duty, making the extended period invalid. However, the counsel did not address the case's merits.

The department's counsel argued that the Commissioner (Appeals) had upheld the applicability of the extended period in the impugned order.

A Single member bench comprising Somesh Arora (Judicial Member) noted that the Commissioner (Appeals) did not deny the filing of ER-1 returns at the time of the August 2012 clearance. However, the Commissioner claimed that complete details of the capital goods clearance were not provided later, without specifying what additional information was required.

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The appellate tribunal found that the Commissioner failed to show any intent to evade duty at the time of clearance. It held that the assessee’s later failure to respond to certain correspondences could not be treated as intent to evade.

The tribunal concluded that the extended period of limitation was not justified due to the lack of fraud or suppression and set aside the order, granting consequential relief.

To Read the full text of the Order CLICK HERE

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