2013 (11) TMI 294 - AT - Service Tax

Denial of Service tax credit Jurisdiction of which Tribunal Held that - There is overlapping of period involved in the show cause notices - The jurisdiction issue goes to the roots of the case, which has not been considered in the order order set aside and the case remanded back to the adjudicating authority to await the outcome of the reference made to the CBEC and consider the matter afresh all the issues are kept open Appeal allowed by way of remand Decided in favour of assessee.

Summary

Issues:
Jurisdictional question - Whether the case should be decided by the Raigad Commissioner or the Commissioner of Service Tax in Mumbai.
Overlap of period in show cause notices.
Clarification sought from the Central Board of Excise & Customs regarding jurisdiction.
Setting aside the impugned order and remanding the case back to the adjudicating authority.

Analysis:
The judgment involves four appeals challenging an Order-in-Original passed by the Commissioner of Central Excise, Raigad, Navi Mumbai, denying Service Tax credit of Rs.7.80 Crores to the appellant, M/s H&R Johnson (India) Ltd. The credit was distributed by the appellant's Head Office in Mumbai, falling under the jurisdiction of the Commissioner of Service Tax, Mumbai. Additionally, the appellant paid Rs.1 Crore. The jurisdictional question raised was whether the case should be decided by the Raigad Commissioner, having jurisdiction over the recipient of the service tax, or the Commissioner of Service Tax in Mumbai, having jurisdiction over the input service distributor who distributed the credit and is registered with the service tax department.

The appellant's counsel argued that the jurisdictional issue was crucial and should have been considered by the adjudicating authority. Notably, the Commissioner of Service Tax, Mumbai, issued a show cause notice demanding reversal of credit amounting to Rs.5.12 crore for the period 2008-09 to 2011-12, overlapping with the period mentioned in the impugned order (2005-06 to 2011-12). The department sought clarification from the Central Board of Excise & Customs on who should decide the case - the Commissioner of Service Tax where the input service distributor is registered or the Commissioner in charge of the manufacturing unit utilizing the credit.

Given the significance of the jurisdictional issue, the appellate tribunal set aside the impugned order and remanded the case to the adjudicating authority. The remand was to await the outcome of the reference made to the Central Board of Excise & Customs and to reconsider the matter if necessary. Importantly, the tribunal clarified that no opinion on the merits of the case was being passed, leaving all issues open for further consideration. Consequently, the appeals were allowed by way of remand, and the stay petitions were disposed of.

In conclusion, the judgment primarily revolves around the jurisdictional question regarding which Commissioner should decide the case, the overlap of periods in show cause notices, seeking clarification from the Central Board of Excise & Customs, and ultimately setting aside the impugned order for further consideration based on the outcome of the jurisdictional reference.