2011 (10) TMI 268 - AT - Service Tax

Power of Commissioner appeal - Held - Commissioner(A) is not empowered to make an order of remand under sub-section (5) of 85 of the Finance Act, 1994 as held by the Tribunal in the case of Orient Crafts Ltd. (2003 - TMI - 51856 - CEGAT, WEST ZONAL BENCH, MUMBAI). However the reason of remand back to re-examine the issue of nexus between the output services and the services claimed to be input services cannot be faulted. Therefore we remand the case to adjudicating authority.

Summary

Issues involved:
Refund of unutilized CENVAT credit on input services for export of output services; Power of remand by Commissioner (Appeals) under Section 35A of the Central Excise Act.

Analysis:
1. Refund of unutilized CENVAT credit: The case involved refund claims of unutilized CENVAT credit on input services used for exporting output services under Rule 5 of the CENVAT Credit Rules, 2004. The jurisdictional Assistant Commissioners rejected the refund claims citing a lack of nexus between the input and output services. The Commissioner (Appeals) passed orders remanding the issue to lower authorities, which was challenged by the appellant. The appellant relied on the Supreme Court's judgment in MIL India Ltd. Vs. CCE, Noida, emphasizing that the Commissioner (Appeals) did not have the power of remand under Section 35A of the Central Excise Act post the Finance Act, 2011. The appellant sought setting aside of the orders passed by the Commissioner (Appeals) without jurisdiction.

2. Power of remand by Commissioner (Appeals): The Tribunal considered previous cases and a Final Order, noting that the Commissioner (Appeals) had directed re-quantification of refunds based on Chartered Accountant's certificates, which the parties agreed to. However, in cases where the Commissioner (Appeals) directed examination of nexus between output and input services, the Tribunal found these to be remand orders. Referring to the lack of empowerment for remand by the Commissioner (Appeals) under the Finance Act, 1994, the Tribunal set aside the relevant orders of the Commissioner (Appeals) in such cases. The Tribunal exercised its power of remand to send these matters back to the original authority for fresh decision and re-quantification of refunds, ensuring a reasonable opportunity for the parties to present evidence.

3. Final Decision: The Tribunal held that the impugned orders were passed without jurisdiction but acknowledged the validity of the reasons for remand by the Commissioner (Appeals). Following a similar view from a previous Final Order, the Tribunal remanded all cases to the original authorities for fresh decisions in line with the Board's Circular dated 19.1.2010. The authorities were directed to allow parties to produce Chartered Accountant's certificates and provide a chance for personal hearings. Any partial benefit granted in earlier proceedings was deemed final.

In conclusion, the Tribunal found the impugned orders to be without jurisdiction, necessitating their setting aside. However, the Tribunal recognized the validity of the reasons for remand and directed the original authorities to re-examine the cases in light of the Board's Circular, ensuring a fair opportunity for the parties to present their case.