ST - Limitation is essentially a question of fact - since disputed question of facts are to be examined, matter has to be agitated before Tribunal: High Court
By TIOL News Service
CHENNAI, SEPT 27, 2016: THE petitioner has challenged the order passed by the Commissioner(A) which confirmed the order passed by the adjudicating authority.
TheHigh Court raised an issue as to why the petitioner has not availed the Appeal remedy available to them in terms of Section 86 of the Finance Act, 1994.
To this,the petitioner submitted that the impugned proceedings were initiated by the respondent departmentby invoking the extended period of limitation, which is not invocable in the petitioner's case.
It is further vehemently contended that though in the show-cause notice, in paragraph No. 5.1 there is an averment as to why the extended period is being invoked, in the Order-in-Original there is no finding to the said effect and this defect was not rectified by the Appellate Authority and as this defect goes to the root of the matter, both the impugned orders are liable for interference by the High Court exercising Writ Jurisdiction.
The High Court observed -
++ Question of limitation in these matters, especially, in Central Excise and Service Tax matters is not essentially a pure question of law, but a mixed question of fact and law. Therefore, question whether extended period of limitation could be invoked or not is essentially a question of fact.
++ The Appellate remedy provided under the Act before the CESTAT is not only an efficacious, but an effective remedy and the CESTAT is entitled to appreciate and re-appreciate the facts and, therefore, there is no justification on the part of the petitioner to bypass the Appeal remedy, more particularly, on the only ground raised by the petitioner before this Court which is purely a question of fact.
++ It is not in dispute that the basis of the show-cause notice was set out in the impugned order that deliberately the petitioner did not disclose the fact of availment of Input Service Credit of exempted service.
++ In the case on hand there is no allegation of fraud or collusion and the case against the petitioner is brought under Clause (c) to (e) in the proviso under Section 73(1), viz., willful misstatement, suppression of facts, contravention of the provisions with intent to evade payment of service tax.
++ But for the investigation by the SIT the wrong availment of Cenvat Credit would not have come to light and these facts would disclose that the petitioner did not disclose the facts with intention to avail ineligible Cenvat Credit and to evade payment of service tax.
++ The second respondent while adjudicating the show cause notice has rendered factual findings to justify the proposal in the show cause notice as well as regarding the conduct of the petitioner being deliberate in not disclosing the facts.
++ To ascertain as to whether there was willful mis-statement or suppression of facts or contravention of the provisions of the Act or the Cenvat Credit Rules with intent to evade payment of service tax is essentially and purely a question of fact, which has to be agitated before the Tribunal.
++ Therefore, this is not a case where this Court can straight away interfere by exercising its power under Writ Jurisdiction, since disputed question of facts are to be examined while considering the validity and correctness of the impugned order.
Concluding that the petitioner should avail the Appeal remedy available under the Act, the Writ Petition was dismissed as not maintainable.
(See 2016-TIOL-2252-HC-MAD-ST )
