2012 (12) TMI 764 - AT - Service Tax

Waiver of pre-deposit towards Input Service Credit - CIT(A) remanded the matter back to verify as to where the impugned Capital Goods were used and who paid for the same - Held that - As decided by in the case of Commissioner vs. Orient Crafts Ltd. (2010 (11) TMI 178 - CESTAT, DELHI) Commissioner (Appeals) dealing with an appeal in relation to Service Tax, is not empowered to remand any matter, but he has to decide the matter by himself, thus Commissioner (Appeals ) Order in the present case remanding the matter to the lower Adjudicating Authority is not sustainable, therefore need to be set aside - remanded back to Commissioner (Appeals) to the decide the matter afresh providing a reasonable opportunity of hearing to the Appellant - in favour of assessee by way of remand.

Summary

Issues:
1. Application for waiver of pre-deposit of Input Service Credit.
2. Denial of Capital Goods Credit and CENVAT Credit.
3. Power of remand by the Commissioner (Appeals) in Service Tax cases.

Analysis:
1. The Applicant sought waiver of pre-deposit of Rs.98,610 towards Input Service Credit, stating they had already paid a portion of the total demand and challenged the denial of Capital Goods Credit. They argued that the remand by the Commissioner (Appeals) on the Capital Goods Credit issue exceeded the scope of appeal as the Adjudication Order was not challenged by the Revenue.

2. Regarding the denial of CENVAT Credit of Rs.9,76,322, the Commissioner (Appeals) acknowledged that the partner and firm were not distinct entities but set aside the Adjudication Order and remanded the matter to verify usage and payment for the Capital Goods. The Appellant contended that this action was beyond the show cause notice's scope and that the Commissioner (Appeals) lacked the power to remand under the Finance Act, 1994.

3. The Tribunal found that the Appeal could be disposed of without further remand. Citing the Supreme Court's decision in MIL India vs. CCE, Noida, it was noted that the power of remand by the Commissioner (Appeals) had been curtailed after an amendment. The Tribunal emphasized that the Commissioner in Service Tax cases is not authorized to remand, as per Section 85 of the Finance Act, 1994. Referring to a previous case, the Tribunal held that the Commissioner (Appeals) must decide the matter without remand, setting aside the remand order and remanding the matter back to the Commissioner (Appeals) for fresh consideration with a reasonable opportunity of hearing for the Appellant. The Appeal was allowed by way of remand, and the Stay Petition was disposed of accordingly.