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CX - In era of self assessment, onus of taking credit correctly has been put on appellant - extended period rightly invoked - Appeal dismissed: CESTAT

By TIOL News Service

MUMBAI, MAY 18, 2016: THE appellant had availed CENVAT Credit of tax paid on certain services received exclusively for use in respect of exempted products. This was detected during the audit conducted by the Revenue.

The demand was confirmed by the lower authorities.

Before the CESTAT, the appellant argued that the credit was taken during the period 2005 to 2009 and the show-cause notice is time barred as there was no mis-declaration on their part.

The AR argued that it is the responsibility of the assessee to take credit correctly and extended period can be invoked in such circumstances where the credit is clearly inadmissible and in violation of law. Reliance is placed on the decision in Balmer Lawrie & Co. Ltd. - 2014-TIOL-69-CESTAT-MUM.

The Bench observed -

"4. …I find that the credit taken by the appellant is clearly inadmissible as the said services were used for the purpose of a totally exempted final product. This is an undisputed fact. The appellant's contention that they had declared the same correctly in their return is misplaced. I find that though the appellant may have declared that they had taken credit in their return, the Self Assessment Memorandum where the appellant have signed reads as follows:-

“(a) I/We declare that the above particulars are in accordance with the records and books maintained by me/us and are correctly stated.

(b) I/We have assessed and paid the Service Tax and/or availed and distributed CENVAT Credit correctly as per the provisions of the Finance Act, 1994 and the rules made thereunder.

(c) I/We have paid duty within the specified time limit and in case of delay, I/We have deposited the interest leviable thereon."

I find that the declaration (b) of the Self Assessment Memorandum is incorrect as they have not taken the credit as per law. This fact has not been disputed by them. Furthermore, in the era of self assessment, the onus of taking credit correctly has been put on the appellant and this self assessment memorandum requires them to take the credit correctly and as per law. Further, in view of the observation of the Tribunal in the case of Balmer Lawrie & Co. (supra), I find that the extended period can be invoked in such circumstances."

The appeal was dismissed.

(See 2016-TIOL-1174-CESTAT-MUM)


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