2018 (8) TMI 85 – CESTAT ALLAHABAD – TMI – CENVAT Credit – common input services used in manufacture of excisable goods as well as in providing trading activities – Rule 6(3) of the Cenvat Credit Rules – extended period of limitation – penalty – Held that:- The learned Commissioner (Appeals) upheld the part demand but set aside the penalty imposed upon appellant and Revenue is not in appeal against that part of the impugned order – The circumstances for imposition of penalty as also for the invocation of extended period are identical inasmuch as both pre-suppose a mala fide mind with intention to evade payment of duty. It is well settled that if penalty has been set aside, thus leading to believing the bona fide of the appellant, the normal period of limitation would not be available to the Revenue – the demand raised beyond the normal period of limitation is not justified, the same is set aside.
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However, a part of a demand would fall within the limitation period and the learne
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eedings were initiated against them by way of issuance of a show cause notice dated 15.03.2016 raising demand of ₹ 43,44,778/- for the period from 2010-11 to 2014-15. The said show cause notice stands culminated into an order passed by the Original Adjudicating Authority confirming the demand along with confirmation of interest and imposition of penalty. This order was upheld by Commissioner (Appeals) to the extent of confirmation of demand and interest to the tune of ₹ 27,15,988/- on the ground that prior to 01.04.2011 trading activities cannot be considered to be exempted services. He also set aside the penalty imposed upon the appellant by observing that the appellant simplicitor did not reverse the amount in terms of Rule 6(3), which cannot be considered to be mala fide on their part. The said order of Commissioner (Appeals) is impugned order before Tribunal. 3. Learned Advocate appearing for the appellant assails the impugned order on the point of limitation. He submit
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n of extended period are identical inasmuch as both pre-suppose a mala fide mind with intention to evade payment of duty. It is well settled that if penalty has been set aside, thus leading to believing the bona fide of the appellant, the normal period of limitation would not be available to the Revenue. As such on this ground as also by taking into account the Tribunal s decisions in the case of Krishna Auto Sales vs. Commissioner of C. EX. S.T., Chandigarh reported at 2015 (40) S.T.R. 1121 (Tri.-Del.) and Commissioner of C. EX., Mangalore reported at 2011 (270) E.L.T. 305 (S.C.), I hold that the demand raised beyond the normal period of limitation is not justified, the same is set aside. 5. However, a part of a demand would fall within the limitation period and the learned advocate has given undertaking to reverse the proportion Cenvat Credit in respect of common services, so utilized by them. It stand held in the above referred judgments that if the credit is reversed it amounts as
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