The Delhi bench of the CESTAT has held that the department cannot avail the benefit of extended period of limitation is not available to Revenue in the present matters, there being no element of fraud, mis-statement or contumacious conduct on the part of the taxpayer.
Tribunal Member (Judicial) Mr. Anil Choudhary was considering an appeal by KEC International Ltd wherein the appellant challenged the order of the excise department for the adjustment of interest (out of refund arising subsequently) by invoking Section 11 AB of the Central Excise Act.
The department contended that they are challenging the levy of interest on the ground of limitation, urging that for want of condition precedent, the extended period of limitation is not available to Revenue. According to them, the impugned transaction is duly recorded in the books of accounts maintained in the ordinary course of business and proper vouchers have been maintained. Further, the appellant have been filing regular returns and paying the admitted taxes. Thus, the invocation of extended period of limitation is bad as there is no element of fraud, mis-statement or contumacious conduct on the part of the appellant, the department argued.
After considering arguments from both the parties, the Single bench relied on ruling of Delhi High Court in the case of Hindustan Insecticides Ltd., which is based on the ruling of the Apex Court in the case of Commissioner Vs. T.V.S. Whirlpool Ltd., and held that “the benefit of extended period of limitation is not available to Revenue in the present matters, there being no element of fraud, mis-statement or contumacious conduct on the part of the appellant. Thus, the demand of interest is hit by limitation. Accordingly, these appeals are allowed and the impugned orders are set aside.”
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