2016 (9) TMI 988 - AT - Service Tax

Refund claim - Cenvat Credit lying unutilised in their books of account - for the period of April 12 to June 12 - export of information technology software service and business support service and availing Cenvat credit of service tax on input service - Held that - it is found that both the orders passed i.e. one is in the appeal filed by the assessee on inadmissibility of refund claim of ₹ 55,30,685/- and other is in the appeal filed by Revenue on admissibility of refund claim of ₹ 13,35,62,158 by the Ld. Commissioners (Appeals) are in conflict. Further, the appeal of the Revenue was pending before the Ld. Commissioners (Appeals) when the appeal of assessee was taken up and disposed of separately. It is a matter of policy and judicial discipline to hear and dispose the cross appeals arising out of the common impugned order together, for avoiding conflict in orders. Accordingly we set aside the impugned orders in both the appeals and remand the matters to the Ld. Commissioners (Appeals) with the direction to take up both the appeals together for denovo disposal and after hearing the parties to pass a reasoned order in accordance with law. - Appeals allowed by way of remand

Summary

Issues:
Appeals arising from two different orders of Commissioners (Appeals) for the same matter; Admissibility of Cenvat credit on input services for export of IT software services; Discrepancies in orders passed by Ld. Commissioners (Appeals); Policy and judicial discipline regarding disposal of cross appeals arising from a common impugned order.

Analysis:

1. The appeals in question were filed by the assessee Appellant and the Revenue arising from two different orders of Commissioners (Appeals) for the same matter. The appellant, engaged in providing IT services, maintenance, and repair services, filed a refund claim under Rule 5 of CCR for claiming unutilized Cenvat Credit. The dispute arose when the SCN was issued proposing denial of a portion of the refund claim due to inadmissible Cenvat Credit availed by the appellant.

2. The Ld. Commissioner (Appeals) disposed of the appeals separately. In the case of the appellant assessee, the order was modified to allow certain input service credits and consequent refunds, subject to verification and compliance with relevant procedures. However, in the case of the Revenue, the order was passed upholding the denial of the appeal based on the failure to establish a nexus between imported input services and output export services.

3. The Tribunal noted the conflicting orders passed by the Ld. Commissioners (Appeals) and emphasized the importance of hearing and disposing of cross appeals arising from a common impugned order together to avoid conflicts. Therefore, the Tribunal set aside both impugned orders and remanded the matters back to the Ld. Commissioners (Appeals) with directions to hear both appeals together for denovo disposal, ensuring a reasoned order in accordance with the law.

4. The Tribunal also directed the appellant-assessee to appear before the Commissioners (Appeals) within a specified period to seek an opportunity for a hearing. Additionally, the consequential remand order passed as directed in the impugned order was also set aside for the ends of justice. Ultimately, the appeals were allowed by way of remand, providing an opportunity for a fresh consideration of the issues by the Ld. Commissioners (Appeals).

This detailed analysis of the judgment highlights the key issues involved, the decisions made by the Ld. Commissioners (Appeals), and the directions provided by the Tribunal for a fair and consistent resolution of the appeals.