2012 (6) TMI 419 - AT - Service Tax

Appealable order - Reversal of the Cenvat Credit - services of renting of immovable property appeal rejected as the letters issued by the Assistant Commissioner demanding the reversal is not an order-in-original against which an appeal lies Held that - As there is a clear finding by the Assistant Commissioner on the question of eligibility to Cenvat credit and also a direction to reverse the credit availed in view of this factual position, the communication satisfies the requirements of an appealable order as decided by the Jaswant Sugar Mills vs. Laxmi Chand 1963 (10) TMI 9 (HC) if a communication in substance contains determination of a question by the application of objective standards as per the legal rules declaring a right affecting their civil rights and it is based on an investigation involving ascertainment of facts by means of evidence it should be considered as proper communication acceptable in the eyes of law - remand the matter back to the lower appellate authority for a decision on merits.

Summary

Issues:
- Appeal against the rejection of Cenvat credit on service tax paid for construction services for renting of immovable property.
- Determination of whether the communication from the Assistant Commissioner constitutes an appealable order under Section 35 of the Central Excise Act, 1944.

Analysis:
1. The appeal and stay application challenged the order-in-appeal passed by the Commissioner of Central Excise, Pune-I, rejecting the appellant's claim for Cenvat credit on service tax paid for construction services utilized in renting immovable property services. The Assistant Commissioner directed the appellant to reverse the Cenvat credit availed along with interest, citing a circular from the Board. The Commissioner (Appeals) dismissed the appeal as premature, stating that the communication from the Assistant Commissioner was not an adjudication order. The appellant contended that the communication constituted a decision or order under Section 35 of the Central Excise Act, 1944, citing legal precedents supporting their argument.

2. The Tribunal considered the submissions and relevant legal precedents. It noted that the communication from the Assistant Commissioner clearly stated the appellant's ineligibility for Cenvat credit on construction services for service tax payment on renting immovable property services, directing them to reverse any availed credit with interest. The Tribunal referred to the criteria set by the Hon'ble Apex Court to determine a judicial decision, emphasizing the need for investigation, application of legal rules, declaration of rights or obligations, and procedural attributes. Based on this analysis, the Tribunal concluded that the communication constituted an appealable order and a quasi-judicial decision. As the lower appellate authority had not addressed the merits of the claim, the Tribunal set aside the impugned order and remanded the matter for a decision on the appellant's eligibility for Cenvat credit, emphasizing the need for a fair opportunity for the appellant to present their case.

3. The Tribunal's decision highlighted the importance of procedural fairness and adherence to legal principles in determining the appealability of administrative communications. By setting aside the lower appellate authority's decision and remanding the matter for a substantive review, the Tribunal ensured that the appellant's rights were protected and that a proper evaluation of the eligibility for Cenvat credit would take place. The ruling underscored the significance of legal standards and precedents in administrative decisions related to tax credits and service tax obligations.