The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the Rs. 1.56 crores demand against Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) for alleged wrong cenvat credit availment.
The bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that the assessee, IRCTC is operating the self- assessment procedure nor that it had failed to assess the tax liability etc. correctly means that the assessee had committed a fraud or colluded or willfully mis-stated or suppressed any fact or violated any provisions of the Act or Rules with an intent to evade. If any of these factors are alleged they should be established in the SCN and in the order.
The appellant/assessee, M/s Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) filed the appeal assailing the order passed by the Commissioner by which she confirmed the demand of Rs. 1,56,66,722 on the appellant on account of alleged wrong availment of Cenvat credit as per Rule 6 read with Rule 14 of Cenvat Credit Rules, 2004 read with the proviso to section 73 (1) of the Finance Act, 1994.
She also ordered recovery of interest under section 75 of the Finance Act and imposed penalties under Sections 76 and 78 of the Finance Act. She dropped the demand of Rs. 12,39,255/- towards service tax liability for the year 2006- 2007.
No appeal has been filed by the Revenue on the demand of service tax dropped by the impugned order. The appellant is aggrieved by the confirmation and recovery of demand, interest and penalties. It contests the demand both on merits and on limitation.
The relevant period is 2004-2005 to 2007- 2008. Therefore, the last date for filing the return of the last period was 25.04.2008. During the relevant period, the show cause notice under Section 73 of the Finance Act had to be issued within a period of one year. The SCN in this case was issued beyond one year on 09.10.2009.
The issue raised was whether the SCN was hit by limitation. Extended period of limitation of upto 5 years could be invoked, if the non-payment of service tax was on account of fraud or collusion or willful mis-statement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of service tax. This limit applies to recovery of Cenvat credit as well.
The tribunal while allowing the appeal held that the assessee furnished it’s returns on time as required and it is the officer who failed to scrutinize the returns in time and took too long to scrutinize the returns pertaining to 2004- 2005 to 2007-2008 much beyond the period of limitation.
Case Details
Case Title: M/s Indian Railway Catering and Tourism Corporation Ltd. Versus The Commissioner of Service Tax
Case No.: Service Tax Appeal No. 50169 Of 2016
Date: 23.04.2025
Counsel For Appellant: S.C. Kamra
Counsel For Respondent: Manoj Kumar
