2016 (4) TMI 150 - HC - Central Excise

CENVAT credit denied on the capital goods - exparte order - Held that - The Tribunal had decided the matter, exparte, considering the issues raised before it. Even though the order of the Tribunal had been passed, on merits, we are of the considered view that a reasonable opportunity ought to have been given to the appellant assessee to put forth its contentions before the Tribunal. As such, we find it appropriate to set aside the impugned order, dated 19.3.2015, passed by the Tribunal and to remit the matter back to the Tribunal for passing appropriate order, on merits and in accordance with law, as expeditiously as possible, after permitting the appellant assessee as well as the respondent department to raise all the grounds available to them. Accordingly, the appeal is ordered.

Summary

Issues:
1. Appeal against Final Order
2. Eligibility of CENVAT credit and penalties
3. Simultaneous availment of CENVAT credit and depreciation
4. Ex parte order by Tribunal

Analysis:
1. The appeal was filed against the Final Order passed by the first respondent, confirming the demand of ineligible CENVAT credit and imposing penalties under the Cenvat Credit Rules, 2002, and the Central Excise Act. The lower appellate authority upheld part of the order, leading to an appeal by the revenue on the simultaneous availment of CENVAT credit and depreciation. The Tribunal remanded the matter to the adjudicating authority, citing the filing of revised income tax returns by the assessee.

2. The Tribunal referred to a Karnataka High Court decision stating that an assessee claiming depreciation and availing Modvat Credit simultaneously is ineligible for credit. Consequently, the Tribunal set aside the Commissioner's order and restored the Order-in-Original, prompting the assessee to file an appeal challenging this decision. The hearing revealed that the Tribunal's order was passed ex parte without giving the appellant an opportunity to present their case.

3. Considering the lack of opportunity for the appellant to present their contentions, the High Court set aside the Tribunal's order and remitted the matter back for a fresh decision, emphasizing the importance of allowing both parties to raise all available grounds. The Court directed the Tribunal to decide the issues on merits and in accordance with the law promptly.

This detailed analysis of the judgment highlights the issues raised in the appeal, the decisions of the lower authorities, the Tribunal's ruling, the subsequent appeal, and the High Court's intervention to ensure a fair hearing for the appellant.