2019 (1) TMI 1660 - AT - Service Tax

CENVAT Credit - inputs/capital goods/input services - rejection on the ground that the requirement of the statute has not been complied with by the appellant - HELD THAT - The appellant has given justification for availment of CENVAT Credit on inputs, input services and the capital goods. However, on perusal of findings recorded in the impugned order, it is found that the learned Commissioner (Appeals) has upheld the adjudication order solely on the ground that the disputed input and input services are falling under the exclusion clause provided in the definition. Since the submissions made by the appellant in the reply to the show-cause notice and the appeal filed before the Commissioner (Appeals) has not been properly considered, the matter should be remanded to the original authority for fresh fact finding with regard to the submission made by the appellant - appeal allowed by way of remand.

Issues:
1. Disallowance of CENVAT Credit on inputs, capital goods, and input services.
2. Compliance with statutory requirements for CENVAT Credit.
3. Adjudication order and penalty under Section 78 of the Act.
4. Appeal against the order of the Commissioner (Appeals).
5. Justification for availing CENVAT Credit.
6. Consideration of submissions and case laws on the issue.
7. Remand to the original authority for fresh fact-finding.

Analysis:
1. The appellant, a service provider, availed CENVAT Credit but faced objections from the department regarding compliance with statutory requirements. Show cause proceedings were initiated, resulting in disallowance of CENVAT Credit amounting to ?4,83,737, along with interest and penalty under Section 78 of the Act. The Commissioner (Appeals) upheld the demands, leading to the appeal before the Tribunal.

2. The appellant's consultant presented a detailed chart outlining the disallowance of CENVAT Credit on various input services, capital goods, and inputs. The grounds for availing CENVAT Credit were explained, contrasting with the department's allegations. The appellant argued in support of the Cenvat benefit, while the department supported the disallowance.

3. Upon review, the Tribunal found that the lower authorities did not consider the issue correctly. The Tribunal noted that the Commissioner (Appeals) upheld the adjudication order based on the exclusion clause in the definition, without fully considering the appellant's submissions. Consequently, the matter was remanded to the original authority for a fresh fact-finding process. The original authority was directed to examine statutory provisions, appellant's submissions, and relevant case laws to determine CENVAT Credit entitlement. The appellant was to be given an opportunity for a hearing before a new decision.

4. The Tribunal allowed the appeal by remanding the case to the original authority for a comprehensive reevaluation of the appellant's entitlement to CENVAT Credit. The decision emphasized the importance of considering all submissions and legal aspects before reaching a conclusion on the matter, ensuring a fair opportunity for the appellant to present their case.

Conclusion:
The judgment highlights the necessity for a thorough examination of statutory provisions, submissions, and case laws in determining CENVAT Credit entitlement. By remanding the case for fresh fact-finding, the Tribunal aimed to ensure a fair and comprehensive assessment of the appellant's claim, emphasizing the importance of due process and proper consideration of all relevant factors in such matters.

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