2017 (9) TMI 501 - AT - Central Excise

CENVAT credit - input services - Since the issue regarding the availability of Cenvat Credit on the said service was not taken up before the original adjudicating authority, the Revenue has contended that it is not open to take up the said issue before the appellate forums - Held that - a SCN was issued on the ground that the said disputed services are not input service. The appellants have not addressed the said issue before the original adjudicating authority. However, it does not preclude them to raising the issue before the appellate forum. In their reply to the original adjudicating authority, the appellants have not specifically conceded that the credit is not admissible to them - matter needs to be remanded to the original adjudicating authority to examine the issue on merits - appeal allowed by way of remand.

Summary

Issues:
Appeal against denial of Cenvat Credit on certain services.

Analysis:
The appellant, M/s. Lombardini India Pvt. Ltd., filed an appeal against the denial of Cenvat Credit on certain services. The appellant argued that they had availed the credit, which was denied by the original adjudicating authority. The defence presented mainly focused on interest and penalty aspects. The Commissioner (Appeals) refused to consider the admissibility of Cenvat Credit as the issue was not raised before the original adjudicating authority. The penalty under Rule 15 of the Cenvat Credit Rules was also contested by the appellant. However, they failed to provide proof of their claim that the credit was reversed without utilization.

The appellate authority noted that the original adjudicating authority did not address the admissibility of the Cenvat Credit on the disputed services since it was not raised as a ground of challenge. The Revenue contended that raising this issue before the appellate forums was not permissible due to its absence before the original authority. The appellant cited the decision of the National Thermal Power Co. Ltd., emphasizing the broad powers of appellate authorities to decide on all relevant issues, even if not raised earlier.

The Tribunal observed that the appellant did not concede that the credit was inadmissible in their reply to the original adjudicating authority. Relying on the legal principles highlighted by the appellant, the Tribunal decided to remand the matter to the original adjudicating authority for a fresh examination of the issue on merits regarding the admissibility of credit. The Tribunal differentiated between additional evidence and new grounds of appeal, emphasizing that the appellant's failure to address the issue before the original authority did not preclude them from raising it before the appellate forum. Consequently, the appeal was allowed by way of remand for a fresh decision on the admissibility of the Cenvat Credit on the disputed services.