2011 (9) TMI 351 - AT - Service Tax

Refund of Cenvat Credit - the nexus between the input services on which CENVAT credit had been availed by the assessees and kept in unutilized credit account and the output services exported by them required to be re-examined by the original authority after requiring the assessees to produce Chartered Accountant s certificates as required in the Board s circular - As the relevant circular Board s Circular No. 120/1/2010 dated 19.01.2010 of the Board was not available to the original authority when the refund claims were examined by it - essentially, what was ordered by the Commissioner (Appeals) in each of these cases was remand of the substantive issue to the lower authority - Hence, decided that the matter should be remanded to original authority and original authority should give the respondents a reasonable opportunity of adducing evidence in the form of Chartered Accountant s certificates and also of being personally heard - matter remanded back.

Summary

Issues involved:
1. Stay of operation of impugned orders sought by the department.
2. Whether impugned orders could be considered as remand orders.
3. Verification of nexus between input and output services by refund-claimants.
4. Applicability of Board's Circular No. 120/1/2010.
5. Power of remand by the Commissioner (Appeals).
6. Decision on refund claims in light of the Board's circular.
7. Opportunity for respondents to produce Chartered Accountant's certificates.
8. Disposal of stay applications.

Analysis:

1. The department filed applications seeking a stay on the impugned orders. Despite notice, there was no representation for the respondents in some appeals. The main contention raised was regarding the impugned orders being considered as remand orders. The learned JCDR argued that the Commissioner (Appeals) did not have the power to pass remand orders, citing a Supreme Court judgment. However, the appellate authority found that the Commissioner (Appeals) had addressed the substantive issue of establishing nexus between input and output services by the refund-claimants in the impugned orders.

2. The Commissioner (Appeals) considered the Board's Circular No. 120/1/2010, which was not available during the initial adjudication. It was determined that the eligibility of input services needed to be verified afresh by the original authority based on the circular and Chartered Accountant's certificates. While the Commissioner (Appeals) technically ordered a remand of the substantive issue, it was noted that the original authority did not have the circular at the time of initial examination. Hence, the matter was remanded to the original authority for a fresh decision in line with the circular and the requirement of Chartered Accountant's certificates.

3. The Tribunal agreed with the reasons provided by the Commissioner (Appeals) for the fresh decision by the original authority. The impugned orders were set aside, and all department appeals were allowed by remanding the cases to the original authority for a fresh decision based on the Board's circular and the production of Chartered Accountant's certificates by the parties. The respondents were to be given a reasonable opportunity to present evidence through the certificates and to be heard personally.

4. In conclusion, the Tribunal disposed of the stay applications and directed the remand of the cases to the original authority for a fresh decision, emphasizing the importance of following the Board's circular and allowing the respondents to provide Chartered Accountant's certificates for verification.