BHARTI AIRTEL LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THIS application filed by the appellant seeks waiver of pre -deposit and stay of recovery in respect of duty of Rs. 7,89,56,288/ - and penalty of Rs. 50,00,000/ -. The impugned demand of duty arises out of denial of Cenvat credit on (i) transmission towers and parts thereof; and (ii) prefabricated buildings/shelters which were claimed by the assessee to be 'inputs' used for the purpose of providing telecom service (output service) during the period from 10 -9 -2004 to 30 -9 -2006. The penalty was imposed under Rule 15(1) of the Cenvat Credit Rules, 2004 on the ground that the above credit, though not admissible, was irregularly taken and utilized. After hearing both sides, we note that, for the present purpose, the learned counsel has laid focus on limitation. As regards the admissibility of Cenvat credit on the aforesaid items, the learned Commissioner (AR) has brought on record a copy of Final Order No. A/1 & 2/2012/CSTB/2012 C -I, dated 6 -1 -2012 which was passed by a Coordinate Bench at Mumbai in the case of M/s. Bharati Airtel Ltd. v. Commissioner of Central Excise, Pune (Appeal Nos. ST/49/2007 & ST/145/2009) [ : 2013 (29) S.T.R. 401 (Tribunal)]. The learned counsel for the appellant also has perused the conclusions recorded in the said Final Order and he agrees that the decision on the above substantive question on merits is against the appellant. It is in this circumstance at the focus of the debate before us has shifted to limitation.

(2.) THE learned counsel for the appellant submits that the entire demand is beyond the normal period of limitation inasmuch as the relevant show cause notice was issued on 6 -9 -2009 for recovery of the Cenvat credit amount for the period from 10 -9 -2004 to 30 -9 -2006. The learned counsel has made the following submissions in his endeavour to establish that the extended period of limitation was invoked in this case without any good reason:

(3.) AFTER giving careful consideration to the submissions, we have not found any formidable ground in this case to support the plea of bona fide belief raised by the learned counsel on behalf of the assessee. The show cause notice had clearly alleged against them that the factum of having availed Cenvat credit on transmission towers and parts thereof as also on prefabricated buildings was not disclosed in the ST -3 returns or otherwise during the period of dispute. The noticee filed a reply dated 9 -9 -2009 but, therein, did not raise the plea of bona fide belief in the context of pleading limitation against the demand of duty. In another context, however, they stated that they had held the bona fide belief that they had rightly availed Cenvat credit, but this statement was made for the purpose of pleading against penalty. During the course of hearing of the case by the adjudicating authority, the assessee filed additional submissions contending inter alia that the extended period of limitation was not invokable in their case which, according to them, involved "interpretation of complex legal provisions". A plea of limitation involves mixed question of fact and law. Therefore, facts must be pleaded at the earliest instant i.e. in a reply to the show cause notice. The law has to be applied upon settlement of the question of fact. On this universally accepted legal tenet, we are constrained to hold that the plea of bona fide belief is not tenable at this stage. Whether the appellant held a bona fide belief is a question of fact, but this fact was not pleaded in the context of challenging the invocation of extended period of limitation. This apart, prima facie, there was no room for "interpretation of complex legal provisions" because the legal provisions were simple. The appellant is claiming Cenvat credit under clause (ii) of the definition of 'input', which reads as under: -