M/S Bharat Sanchar Nigam Ltd v. The Customs And Excise And

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Reserved on : 22.10.2021 Pronounced on : 28.10.2021 THE HONOURABLE TMT. JUSTICE PUSHPA SATHYANARAYANA and THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ C.M.A.No.3431 of 2012 and M.P.No.1 of 2012 M/s Bharat Sanchar Nigam Limited, Court Road, Nagercoil-629 001 ...Appellant Vs

1. The Customs and Excise and Service Tax Appellate Tribunal, South Regional Branch, Chennai.

2. The Commissioner of Central Excise, Tirunelveli ... Respondents Prayer: This Civil Miscellaneous Appeal is filed under Section 3-G of C.E. Act read with Section 83 of Finance Act, 1994 to set aside the impugned Final Order No.1325 of 2011 dated 20.12.2011 in Appeal No.ST/380/2011 and allow this appeal. For Petitioner :

Mr.M.S. Velusamy For Respondent-1 : Tribunal For Respondent-2 :

Mr.Gurumoorthy ( Standing counsel)

JUDGMENT

MOHAMMED SHAFFIQ,J.

The short question there arises for consideration in the present Civil Miscellaneous Appeal filed by M/s.Bharat Sanchar Nigam Limited, is as to whether the show cause notice dated 15.01.2010 proposing reversal of Input Tax Credit of Rs.2,11,899/- wrongly availed by M/s.Bharat Sanchar Nigam Limited, Nagercoil in respect of input tax credit paid on security services received for cell phone towers during the period from 01.04.2005 to 31.12.2006 is barred by limitation. The input tax credit is sought to be reversed in as much as BSNL Nagercoil is not engaged in providing cellular services while BSNL Tirchy unit is engaged in providing cell phone services. Thus, BSNL Trichy may be entitled to such credit but not BSNL Nagercoil.

2. Relevant date is distinguished as per Section 73(1) of the Finance Act, 1994 which is extracted hereunder: " Where any service tax has not been levied or paid or has been short levied or short paid or erroneously refunded, the Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice;

Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; of (e) contravention of any of the provisions of this chapter or of the rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this subsection shall have effect, as if, for the words " one year" the words "five years"had been substituted."

A reading of the above would show that the normal period for recovery of service tax not levied or paid or erroneously refunded is one year and if the same is by reason of fraud or collusion or wilful mis-statement or suppression of fact or contravention of any of the provisions of this chapter or any of the rules made with intent to evade payment of tax, recovery may be made within a period of 5 years from the relevant date.

4. Admittedly the present show cause notice and the consequential orders can be sustained only, if circumstances warrant invoking extended period of limitation. To invoke the extended period of limitation, it is necessary to show that the service tax has not been levied or paid or short paid by reason of fraud or collusion or legally mistaken or suppression of fact or contravention of any of the provisions of this chapter or any of the rules made with intent to evade payment of service tax. These ingredients postulate a positive act and a mere erroneous claim due to mis-interpretation or a technical lapse by itself would not confer jurisdiction to invoke extended period.

5. In the present case, it is not seriously disputed that erroneous claim of credit is more a technical or venial breach rather than a conscious/deliberate attempt to evade payment of duty or to avail illegitimately by fraud, collusion, willful mis-statement or suppression of facts.

6. In the light of the above, we are of the view that order of the Tribunal confirming the proceedings invoking extended

period is erroneous and liable to be set aside. In the circumstances this Civil Miscellaneous Appeal stands allowed. Consequently, connected civil miscellaneous petitions is closed. Sd/- Assistant Registrar(CS III) //True Copy// Sub Assistant Registrar smn To

1. The Customs and Excise and Service Tax Appellate Tribunal, South Regional Branch, Chennai.

2. The Commissioner of Central Excise, Tirunelveli.

+1 cc to Mr.M.S. Velusamy, Advocate Sr.NO. 55957 C.M.A.No.3431 of 2012 and M.P.No.1 of 2012 BP(CO) A.SK(06.12.2021)