IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 17.10.2024 CORAM:

THE HONOURABLE MR.JUSTICE R.SURESH KUMAR and THE HONOURABLE MR.JUSTICE C.SARAVANAN CMA.No.1219 of 2018 and CMP.Nos.15432 of 2022 & 9915 of 2018 M/s. Cholamandalam MS General Insurance Co. Ltd., General Insurance Co. Ltd., Dare House, 2^nd Floor, No.2, NSC Bose Road, Chennai – 600 001.

...Appellant Vs.

1.Assistant Commissioner of Goods and Service Tax & Central Excise, Egmore Division : North Commissionerate Newry Towers, Plot No.2054, 1st Block, 12th Main Road, Second Avenue, Anna Nagar, Chennai – 600 040.

2.The Customs, Central Excise and Service Tax Appellate Tribunal, No.26, Haddows Road, Chennai – 600 006.

... Respondents Prayer: Appeal filed under Section 83 of the Finance Act, 1994 read with Section 35 G of the Central Excise Act, 1944 to set aside the order passed by the CESTAT (Respondent No.2) in Final Order No.42719/2017 dated

03.11.2017 in Appeal No.ST/41976/2016-SM.

For Appellant : M/s.Lakshmi Kumaran For Respondent : Mr.S.Gurumoorthy Sr. Standing Counsel

JUDGMENT

(Delivered by C.SARAVANAN, J.

This Civil Miscellaneous Appeal has been filed under Section 83 of the Finance Act, 1994 read with Section 35 G of the Central Excise Act, 1944, is directed against final order No.42719/2017 dated 03.11.2017 in Appeal No.ST/41976/2016-SM, passed by the Customs, Central Excise and Service Tax Appellate Tribunal at Chennai.

2. This appeal was admitted on 14.06.2018. Following substantial questions of law were framed:-

1. Whether in the facts and circumstances of the case, the Hon'ble Tribunal has erred in upholding invocation of extended period of limitation in terms of proviso to Section 73 of the Finance Act, 1994 when none of the ingredients stipulated therein have been satisfied?

2. Whether the Hon'ble Tribunal was right in holding that every case of short-payment or short-expungement in statutory returns leads to an inevitable conclusion of malafide intent to evade payment of tax?

3. Whether in facts and circumstances of this case, the Hon'ble Tribunal was right in holding that the Appellant had malafide intention even though the short-payment and short-expungment in the present case is attributable to genuine clerical errors?

4. Whether in facts and circumstances of this case, the Hon'ble Tribunal was right in upholding imposition of penalty under Section 78 of the Finance Act, 1994 and Rule 15 (3) of the Credit Rules even in a case where there is no positive finding of suppression?

5. Whether in the facts and circumstances of this case, the Hon'ble Tribunal has erred in not extending the benefit of Section 80 of the Finance Act, 1994 even though the Appellant had a reasonable cause for short- payment of service tax and short-

expungement of Credit?

3. By the impugned order, the Tribunal has dismissed the appeal of the appellant against order in appeal No.44/2016 dated 25.07.2016 confirming the decision of the Additional Commissioner in Order-in-Original No.LTUC/41/2015-ADC dated 05.02.2015, operative portion of the impugned order reads as under:-

“After hearing both sides, I find that appellants are not disputing the confirmation of differntial demand of service tax, which has essentially arisen on account of discrepancies in the figures in the value of the services as shown in their audit records and as reflected in their returns. No explanation is being forwarded by the appellants to justify such differentiation. They have also not contested the demand and have deposited the differential duty along with interest.”

4. The dispute relates to a purported failure of the appellant to pay tax in respect of certain taxable events in the returns filed by the appellant for the period between 01.04.2008 – 31.03.2012. These short comings were noticed during statutory special audit conducted by the Department during February –

March 2012.

5. The appellant paid the tax pointed out by the audit team on

24.12.2012, partly from the CENVAT Account and partly paid in cash by remitting the sa