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Whether provisions relating to suppression of facts invokable — Jurisdictional officer not intimated by concerned branch of SBI about providing both taxable and exempted service — No declaration made in ST-3 returns — Provisions of Rule restricting utilisation of credit clear — Tax evasion detected on audit — Longer period of limitation invokable.
Facts:
A branch of the State Bank provided both taxable and exempted service. During February 2005 the respondents utilised CENVAT credit exceeding the admissible limit of 20% amount as provided in the then Rule 6(3) of the CENVAT Credit Rules, 2004. The Department alleged that the said branch of SBI did not disclose to the Department that they provided exempted output service also and that they have taken service tax in excess of the admissible 20% amount. The said evasion came to light when the accounts of SBI were audited by the Departmental audit officers. As per the Revenue, this was a clear contravention of service tax law on part of the respondents with an intention to evade payment of service tax. Moreover, the longer period of limitation was rightly invoked. Citing the case of Pushpam Pharmaceuticals Co. v. Collector of Central Excise, Bombay, 1995 (78) ELT 401 (SC), it was inter alia contended that there was no intention to evade service tax and that the head office of the respondents had issued a circular asking the branches to utilise CENVAT credit keeping in view the admissible 20% amount. However, copy of such circular was not produced.
Held:
The Tribunal observed that several ingredients required for the purpose of invoking longer period of limitation u/s. 73 of the Finance Act, 1994 were available in the case such as misstatement, suppression as well as contravention of provision with intent to evade payment of tax. Accordingly, it was held that the period of limitation was invokable in this case. The appeal was remanded to the lower Appellate Authority as regards the merit of the case.
