By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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If one senior officer interpreted the law in a manner favourable to the assessee, the assessee cannot be said to have malafide intention for invoking the extended period of limitation.
Facts:
The appellant engaged in trading activities was also offering free warranty for limited period and thereafter, undertaking the job of maintenance and repair of products sold.
The services provided during warranty were exempt services and after warranty were taxable. Revenue entertained a view that the CENVAT Credit only to the extent of an amount not exceeding 20% of service tax was available.
The department held that 20% restriction on availment of CENVAT credit was not applicable in respect of sale of service as also for taxable services of maintenance and repair.
The order of additional commissioner was reviewed by the Commissioner and the 20% restriction was imposed.
Held:
Appeal can be disposed off as the Additional Commissioner had interpreted the provisions in favour of the assessee. When one senior officer of the department is dropping the demand by interpreting a particular provision of law, the assessee cannot be held guilty for adopting the same interpretation which is in his favour. In the absence of any other evidence that credit was availed with malafide intention, invocation of longer limitation period was not justified.
