2014 (8) TMI 435 - AT - Central Excise

CENVAT Credit - CHA services and Clearing & Forwarding Agent Services - Held that - In view of CCE Ahmedabad-II Vs Cadila Healthcare Ltd (2013 (1) TMI 304 - GUJARAT HIGH COURT) appellant seems to have a good case on merits. Under the circumstances, it is not justified on the part of first appellate authority to order nearly 100% of pre-deposit when the appellant has an arguable case in view of a favourable decision from the jurisdictional High Court. As the issue lies in a narrow compass, therefore, after allowing the stay application, appeal itself is taken up for disposal. Accordingly, order dt.07.01.2014 passed by first appellate authority, rejecting the appellants appeal for non-compliance, is set aside and matter is remanded back to him for deciding the issue on merits without insisting for any pre-deposit from the appellant in these proceedings - Decided in favour of assessee.

Summary

Issues: Stay application and appeal regarding non-compliance of pre-deposit in OIA, admissibility of CENVAT Credit on CHA services and Clearing & Forwarding Agent Services.

The judgment pertains to a stay application and appeal filed by the appellant against the Order-in-Original (OIA) passed by the first appellate authority, which dismissed the appeal due to non-compliance with a pre-deposit requirement of Rs. 1,40,000. The appellant, represented by Shri Jigar Shah, argued that the issue in question was the admissibility of CENVAT Credit on CHA services and Clearing & Forwarding Agent Services. The appellant cited a favorable High Court judgment and a previous order by the Bench to support the admissibility of the credit. The appellant requested a remand to the first appellate authority to decide the issue on merits without insisting on the pre-deposit.

After hearing both parties and reviewing the case records, the judge noted that the appeal was dismissed for non-compliance with the pre-deposit order. However, considering the favorable High Court judgment cited by the appellant, the judge found that the appellant had a strong case on merits. The judge deemed it unjust to require nearly 100% pre-deposit when the appellant had a valid argument based on the High Court decision. As the issue was narrow, the judge allowed the stay application and proceeded to dispose of the appeal. The order rejecting the appeal for non-compliance was set aside, and the matter was remanded to the first appellate authority to decide on merits without demanding any pre-deposit from the appellant.

The judge emphasized that the appeal should be allowed by remanding it to the first appellate authority. It was clarified that the Bench had not expressed any opinion on the case's merits, leaving all issues open for the first appellate authority to decide after providing the appellant with a personal hearing. Therefore, the appeal by the appellant was allowed by remanding it to the first appellate authority for further proceedings.