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ST - Tribunal rendered a mixed finding which is plausible and a possible one, hence questions proposed by Revenue are not substantial questions of law: High Court

 

By TIOL News Service

MUMBAI, FEB 06, 2019: REVENUE had filed an appeal before the CESTAT contending that the adjudicating authority while denying the CENVAT credit had not ordered confiscation of the capital goods on which such credit was improperly availed.

The CESTAT noted that the very same o-in-o was appealed against by the respondent service provider and the Bench had held as under-

 

ST - Appellants providing Telecommunication Service - CENVAT not admissible on towers and pre-fabricated buildings - As returns were filed periodically and audit was also conducted by the department, demands hit by limitation - Demand for normal period upheld along with interest - Penalties set aside as appellants entertained a bonafide belief: CESTAT

See -  2015-TIOL-628-CESTAT-MUM

And, therefore, in the matter of the Revenue appeal, the CESTAT held-

"…When the main appellant's case itself is decided by setting aside the extended period of limitation and the penalties imposed, holding that this could be an issue of interpretation, the question of confiscation of the capital goods does not arise."

The Revenue appeal was rejected. We reported this order dated 13.05.2015 as - 2015-TIOL-1133-CESTAT-MUM .

Unhappy with this order, Revenue took the matter to the Bombay High Court.

The High Court considered the submissions and inter alia observed -

"4. … The Appeal itself was filed by the Revenue on the point of confiscation of capital goods on which cenvat credit was improperly availed. The Tribunal found that the submission of the Revenue even if noted and on this point, that does not carry its case any further. Until the Tribunal stepped in and conclusively held that no cenvat credit can be claimed as the goods are capital goods, the matter was at large. Secondly, in that Appeal, the Tribunal also rendered findings on whether the dem and can be sustained in its entirety as set out in the show cause notice or that partially the same is within limitation and the rest of it cannot be sustained. Thus, the issue of limitation has been dealt with. Finally, the Tribunal also found that because the issue was of interpretation and arguable, the penalties cannot be sustained. They also cannot be sustained because the demand has not been upheld in full. It is on such an overall consideration that it found that the plea of confiscation of the goods, which must follow the conclusion on merits, cannot be accepted. This a finding rendered in the backdrop of the peculiar facts and circumstances. It is thus a mixed finding. Once such is the nature of the finding and it cannot be termed as perverse, but a plausible and possible view of the matter, then, the questions proposed by the Revenue in this appeal are not substantial questions of law."

The Revenue Appeal was dismissed.

(See 2019-TIOL-294-HC-MUM-ST)


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