2016 (2) TMI 473 - HC - Service Tax

Validity and scope of Interim order while passing Final Order - whether Tribunal is empowered to pass non-speaking orders while disposing of statutory appeals and while discharging judicial functions - Refund of accumulated cenvat credit - Relevant date in case of export of services - Held that - it is clear that the Tribunal in all its eagerness to decide the pending cases in order to reduce the pendency of appeals has adopted a technique in clubbing nearly 192 cases and passing an interim order on all the issues involved in the batch of cases and the same is applied in the Final Order of the individual cases. We would have appreciated if the Tribunal had passed the Final Order in one case and the same is adopted in other batch of cases. The scope of Interim Order is very limited. It is temporary and effective only during the pendency of litigation; ceases to exist as soon as the Final Order is passed. No law can be laid down in an interim order. The procedure adopted by the Tribunal is strange and contrary to the settled principles of law. Passing Final Order referring to the paragraphs in the Interim Order is not a speaking order. As such the order passed by the Tribunal is not sustainable. - Matter remanded back.

Summary

Issues involved:
1. Tribunal's reliance on interim orders before finality
2. Admissibility of CENVAT credit when output service is not taxable
3. Refund claim within limitation under Notification No.5/2006 CE [NT] and Sec.11 [b] of the Central Excise Act, 1944
4. Eligibility for refund based on the date of receiving export proceeds in foreign currency
5. Treatment of the date of issue of invoice for export services as the date of export
6. Validity of a non-speaking order by the Tribunal

Analysis:

1. The appellant challenged the Tribunal's reliance on interim orders before finality, arguing that passing a common interim order for multiple cases was improper. The Tribunal remanded the matter based on the interim order, which the appellant contended was unheard of in legal practice. The primary issues were the taxability of output service and the calculation of the relevant date for limitation purposes. The appellant sought to set aside the final order and requested a speaking order from the Tribunal.

2. The respondent argued that the Tribunal extensively addressed the issues in the interim order, citing a previous court judgment to support the refundability of service tax paid on input services even if the output service is not taxable. The respondent also contended that the Tribunal correctly determined the refund claim within the normal period based on legal precedents. The respondent supported the Tribunal's approach of clubbing cases with common issues to expedite the resolution process.

3. The High Court observed that the Tribunal's approach of passing a common interim order for multiple cases and applying it to individual final orders was unconventional. The Court emphasized that interim orders are temporary and do not establish legal principles. Referring to paragraphs in the interim order in the final judgment without providing a detailed explanation was deemed insufficient. Consequently, the Court remanded the matter back to the Tribunal to issue a speaking order with reasons, ensuring a fair hearing for both parties. The Tribunal was directed to proceed promptly with the case in accordance with the Court's observations.