Section 73 – Period of limitation cannot be invoked if demand arises out of correct figures shown in ST 3 return

case laws on tax
case laws on tax

Central Warehousing Corporation Vs. Commissioner of Service Tax, Ahmedabad – CESTAT

FACTS & BACKGROUND

In the instant case, Central Warehousing Corporation (“the Appellant”) filed an appeal before the Hon’ble CESTAT, Ahmedabad against the Order of the Ld. Commissioner (Appeals) wherein demand of Rs. 6,18,946/- was confirmed against the Appellant by invoking extended period of limitation under Section 73 of the Finance Act, 1994 (“the Finance Act”).

The Appellant submitted that the aforesaid demand was raised as per CERA objection on the basis of short payment of Service tax shown in Service Tax Returns (“ST-3 Returns”) filed by the Appellant. Accordingly, when proper duty calculations were shown in the ST-3 Returns, extended period is not invokable. The Appellant relied upon the following cases in support of his contentions:

  1. Aneja Construction (India) Ltd. Vs. CST [Final Order No. A/1262/2012 – WZB, dated 9-8-2012]
  2. Commissioner Vs. Meghmani Dyes & Intermediates Ltd. [2013 (288) E.L.T 514 (Guj)] (“Meghmani Dyes case”)
  3. Bhansali Engg. Polymers Ltd. Vs. CCE [2008 (232) ELT 561 (Tri. Delhi)]
  4. Johnson Mattey chemical India P. Ltd. Vs. CCE [Final Order No. 50323 of 2014, dated 22-1-2014]

However, the Revenue argued that the extended period is rightly applicable in the present case because the Appellant failed to give details/ information that short payment made in a particular month was made good in the next month’s Service tax payment.

DECISION

The Hon’ble CESTAT, Ahmedabad, relying on the decision in the Meghmani Dyes case, held that if prescribed Returns are filed by Assessee giving correct information, then extended period of limitation cannot be invoked. In the instant case also, prescribed ST-3 Returns were duly filed by the Appellant giving correct information and differential tax payable was apparent from the figures furnished by the Appellant.

Accordingly, the Appellant cannot be held to have suppressed any information with intention to evade payment of Service tax and thus, extended period cannot be invoked. Therefore, the demand raised on the Appellant is time-barred.

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