Precision Equipments Chennai Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal by holding that the extended period of limitation could not be invoked where the Department itself had disputed the Central Excise Revenue Audit (CERA) objection that led to the issuance of the show cause notice. The dispute concerned service tax of ₹4,54,786 allegedly payable on certain job work activities undertaken between September 10, 2004 and March 31, 2006, which the Department classified as taxable under Business Auxiliary Service. The show cause notice was issued on May 21, 2007, beyond the normal limitation period, invoking the extended period on the ground of suppression of facts.
The appellant argued that the demand originated from a CERA audit objection, which was itself disputed by the Department and consequently kept in the call book. It contended that where the Department shared the appellant’s view on the interpretational issue, suppression of facts could not be alleged. The appellant also raised arguments on the scope of Business Auxiliary Service during the relevant period, subsequent amendments to the statutory definition, payment of central excise duty on certain transactions, the manufacturing nature of the activities, reliance on certificates from the principal manufacturer, and the unsustainability of penalties. The Revenue maintained that certain activities did not amount to manufacture, documentary evidence had not been produced for some claims, and the extended period was correctly invoked.
