2017 (4) TMI 997 - AT - Service Tax

CENVAT credit - input services - case of Department is that the Commissioner (Appeals) has relied upon the judgment passed in the case of M/s Kyocera Wireless (I) Pvt. Ltd Vs Commissioner of S. Tax, Bangalore in 2014 (9) TMI 1036 - CESTAT BANGALORE . The said order is only an interim order passed by the Tribunal and does not have any precedent value and therefore Commissioner (Appeals) ought not to have relied upon such interim order to allow the credit/refund - Held that - All the said services have been held to be eligible for credit by various judgments of the Tribunal including the Final Order of this Tribunal. Further, the Commissioner (Appeals) has only remanded the matter for reconsideration by the adjudicating authority. Therefore, I hold this ground put forward by the Department as unacceptable. CENVAT credit - denial on the ground that service tax was paid with much delay after being pointed out in audit - Held that - the respondent/assessee is not barred from taking credit in terms of Rule 9(1)(bb) for the reason that Rule 9(1)(bb) bars the availment of credit when the service tax is paid pursuant to the notice issued alleging fraud, suppression of facts and wilful misstatement - credit allowed. Validity of remand order - Although the Commissioner (Appeals) remanded the matter to adjudicating authority for reconsideration of the issue of eligibility of credit, there is no specific direction made for the remand - Held that - The Commissioner (Appeals) has given detailed discussion of the issues, facts as well as the law relating to them and thereafter has arrived at the conclusion that respondents are eligible for credit/refund. He has remanded the matter only for the limited purpose of verifying and granting the refund. Sub-section (4) of Section 85 does not limit the powers of the Commissioner (Appeals) to remand a matter. Appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Department's appeal against Commissioner (Appeals) order allowing credit on certain input services for refund and remanding issues for denovo adjudication.
2. Department's contentions regarding reliance on interim order, belatedly paid service tax, lack of specific remand direction, and nexus of input services with output services.
3. Respondent's defense based on analysis by Commissioner (Appeals, circulars, and Tribunal judgments supporting eligibility for credit/refund.

Analysis:
1. The Department raised four grounds of appeal challenging the Commissioner (Appeals) order. Firstly, objected to reliance on an interim order, arguing it lacks precedent value. However, the Tribunal held that the Commissioner's decision was not solely based on the interim order, supported by various Tribunal judgments, including a Final Order. Hence, the Department's argument was rejected.
2. The second contention was that the appellant should not take credit for belatedly paid service tax under reverse charge mechanism due to lack of nexus with the refund claim period. The Tribunal referred to Circular No. 120/01/2010 and a Final Order supporting the eligibility for refund even for past periods. The Tribunal found the Department's argument baseless and upheld the refund claim.
3. The third objection was the lack of specific direction for remand by the Commissioner (Appeals). The Tribunal disagreed, stating that the Commissioner's detailed discussion and analysis justified the remand for verifying and granting the refund. The Tribunal found no error in the remand decision.
4. The fourth issue raised was the Commissioner (Appeals) not establishing the nexus of input services with output services while allowing the refund. The Tribunal clarified that the Commissioner's decision was based on thorough analysis and discussion, dismissing the Department's appeal. The Tribunal commended the Commissioner for the detailed examination of the issues.

In conclusion, the Tribunal dismissed the Department's appeals, upholding the Commissioner (Appeals) decision on the eligibility for credit/refund of input services. The Tribunal emphasized the importance of detailed analysis and legal backing in such matters, supporting the decision based on circulars, Tribunal judgments, and statutory provisions.