Mere failure to pay Excise Duty, not due to Fraud or wilful misstatement is not sufficient to attract extended Period of Limitation: CESTAT [Read Order]

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that mere failure to pay Excise Duty, not due to fraud or wilful misstatement is not sufficient to attract the extended period of limitation.

The appellant, M/s. Delta Power Solutions India Pvt. Ltd. is a manufacturer of Power Rectifier systems, UPS systems, industrial automation devices, video and audio display systems and electric motors, etc. The appellant claims that for this purpose it has been procuring various inputs, capital goods, and input services and also availed CENVAT Credit on excise duty and service tax paid on the said items. The appellant has also stated that during the period of dispute from April 2010 to March 2011, it was also engaged in the manufacture of Solar Power Systems, but these goods were exempted from levy of excise duty under a Notification. During this period, the appellant manufactured 48 Solar Power Systems worth Rs.4,98,23,250/- and cleared the same from the factory without payment of excise duty.

A perusal of section 11A (1) of the Excise Act shows that where any duty of excise has not been paid for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Excise Act with intent to evade payment of duty, the Central Excise Officer shall, within one year from the relevant date, serve notice on the person requiring him to show cause why he should not pay the amount specified in the notice. However, sub-section (4) of section 11A of the Excise Act provides that where any duty of excise has not been levied or short paid by reason of fraud or collusion or any wilful misstatement, the notice can be issued by the Central Excise Officer within five years from the relevant date.

The coram headed by President Justice Dilip Gupta and Technical Member, C.J.Mathew ruled that the Department cannot be permitted to invoke the period of limitation by merely stating that it is a case of self-assessment. This apart, an assessee is called upon to provide only that information that is required to be furnished in the self-assessment form. There is no averment in the show cause notice, nor there is any finding in the order passed by the Commissioner (Appeals) that the appellant had provided incorrect information to any matter required to be stated in the self-assessment form with the intent to evade payment of service tax. All that has been stated is that the transaction details were not supplied to the Department and merely because of this, it has been assumed that the appellant suppressed facts with intent to evade payment of service tax. Suppression in self-assessment matters can arise only when the information sought in the prescribed form is not supplied or incorrect information is supplied.

To Read the full text of the Order CLICK HERE

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