2014 (8) TMI 366 - AT - Central Excise

CENVAT credit - input services - Gardening Services availed by the appellant - Held that - as per Clause 3(j) of permission granted to the appellant by Gujarat Pollution Control Board, Gandhi Nagar, which is obligatory to carry out adequate plantation all along the periphery of the industrial premises in such a way that the density of plantation is at least 1000 trees per acre of the land and a green belt of 5 meters width is developed. It was emphasized by the learned advocate that the maintaining of green belt was mandatory and services of such service providers were availed for which the credit has been taken - appellant has prima facie strong case on merits, therefore, order passed by the first appellate authority is set-aside and case is remanded back for de-novo consideration without insisting on any deposit from the appellant - Following decision of CCE Vadodara Versus M/s Diamines & Chemicals Ltd. 2013 (7) TMI 674 - CESTAT AHMEDABAD - stay granted.

Summary

Issues:
1. Non-compliance of pre-deposit leading to dismissal of appeal.
2. Admissibility of CENVAT credit for Gardening Services.

Analysis:
1. The appeal was filed due to the dismissal of the appellant's appeal in OIA No. VAD-EXCUS-001-APP-587-2013-14 for not complying with the pre-deposit of Rs. 5 Lakh as ordered by the first appellate authority. The appellant argued that the issue revolved around the CENVAT credit related to Gardening Services availed by them. The appellant highlighted the mandatory requirement of maintaining a green belt as per the permission granted by the Gujarat Pollution Control Board and availing services for the same, for which credit was taken. The advocate cited previous cases where similar credits were deemed admissible.

2. After hearing both sides and examining the case records, the Tribunal found that the appellant had a strong case on merits based on the case laws presented. The Tribunal deemed the pre-deposit of Rs. 5 Lakhs by the first appellate authority as unjustifiable against a duty demand of Rs. 4,62,105. Consequently, the stay application was allowed, and the appeal itself was taken up for disposal. Given the appellant's strong case, the order-in-appeal dated 31.12.2013 was set aside, and the case was remanded back for de-novo consideration without requiring any deposit from the appellant. It was clarified that the Tribunal did not express any opinion on the case's merits, leaving it to the first appellate authority to decide after following the principles of natural justice. Ultimately, the appeal was allowed by remanding it to the first appellate authority for further consideration.