2015 (7) TMI 1000 - HC - Central Excise

Denial of CENVAT Credit - Capital goods - Held that - Department itself has conceded the matter before the Tribunal and, therefore, it is estopped from filing this appeal, this Court, however, is of the considered opinion that even in such a situation, the Tribunal should have given some brief facts of the case and also recorded its reasoning to support its order. The reasoning of the earlier order is not evident. As the order of the Tribunal, recorded above, is cryptic and bereft of any facts and reasoning, we do not want to go into the factual aspect of the case and the questions of law raised. In such view of the matter, this Court is of the considered view that the matter has to be remanded back to the Tribunal for passing a reasoned order on consideration of the facts in issue. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Tribunal's dismissal of appeal by the Revenue.
2. Availment of excess ineligible cenvat credit by the assessee.
3. Tribunal's decision on contravention of Cenvat Credit Rules.
4. Eligibility of the assessee to avail excess Cenvat Credit.
5. Tribunal's reliance on previous case law for availing Cenvat credit.

Analysis:
1. The appellant, a Revenue entity, challenged the Tribunal's dismissal of their appeal. The Tribunal's order lacked reasoning and facts, merely citing a previous decision in favor of the respondents. The High Court refrained from delving into the legal questions raised, emphasizing the need for a reasoned order. Consequently, the matter was remanded to the Tribunal for a thorough reconsideration based on facts and merits.

2. The first respondent, engaged in IC engine parts manufacturing, availed cenvat credit on various inputs and capital goods. Following discrepancies in credit availed, a show cause notice was issued, leading to a demand for excess ineligible cenvat credit with penalties and interest. The Commissioner (Appeals) overturned the initial order, prompting the Department's appeal to the Tribunal. The Tribunal's cryptic dismissal prompted the Revenue's appeal to the High Court.

3. The Tribunal's decision on the contravention of Rule 3 and Rule 9(3) of Cenvat Credit Rules was a focal point. Despite discrepancies in credit availed, the Tribunal's order lacked substantive reasoning, necessitating a remand for a detailed reconsideration. The High Court highlighted the importance of a reasoned order to address the complexities of the case adequately.

4. The eligibility of the respondent to avail excess Cenvat Credit, particularly passed on by another entity, was a contentious issue. The Tribunal's decision lacked clarity and reasoning, leading the High Court to remand the matter for a comprehensive review. The judgment underscored the necessity of detailed analysis in matters concerning cenvat credit eligibility and compliance with relevant rules.

5. The Tribunal's reliance on a prior case law for availing Cenvat credit was another significant issue. The High Court stressed the importance of a well-founded decision based on the specific facts of the case. By remanding the matter for a fresh consideration, the High Court aimed to ensure a thorough examination of the legal and factual aspects involved, without delving into the substantive legal questions raised in the appeal.