2018 (4) TMI 959 - HC - Central Excise

Whether the Customs Excise & Service Tax Appellate Tribunal, Allahabad is correct in setting aside the order in original dated 12.11.2010 and the order in appeal dated 29.09.2011 on the basis of Circular No.964/07/2012-CX dated 02.04.2012.? Held that - On being confronted, learned counsel for the respondents could not satisfy the Court nor sustain the impugned order in view of this ground of challenge, therefore, in this view of the matter, we are of the view that the Tribunal has erred on the aforesaid count - The adjudicating authority order could not have been set aside by the Tribunal without dealing with and setting aside the findings and reasoning given by him in support of his order. Matter remitted back to the Tribunal to consider and decide afresh in accordance with law.

Summary

Issues:
1. Challenge to the final order of Customs Excise & Service Tax Appellate Tribunal
2. Interpretation of Circulars related to Central Excise Act
3. Admissibility of Cenvat Credit on specific items

Analysis:
The judgment by the Allahabad High Court pertains to an appeal challenging the final order of the Customs Excise & Service Tax Appellate Tribunal under Section 35-G of the Central Excise Act, 1944 read with Section 174 of the Central Goods & Services Tax Act, 2017. The appeal raised questions of law regarding the correctness of the Tribunal's decision in setting aside previous orders based on Circulars issued by the authorities. The appellant argued that the items claimed as inputs were non-dutiable under the Central Excise Tariff, hence not eligible for Cenvat Credit. The Tribunal's decision was criticized for not adequately addressing the findings of the adjudicating authority and relying on Circulars without proper justification.

The Court found merit in the appellant's contentions and held that the Tribunal erred in not providing sufficient reasoning to overturn the adjudicating authority's findings. Consequently, the High Court quashed the Tribunal's judgment and remitted the matter back for fresh consideration. The Court directed the Tribunal to reexamine the case within three months, emphasizing the importance of following applicable Circulars and conducting a comprehensive review in accordance with the law. It was emphasized that the Tribunal serves as the final fact-finding authority in this matter, highlighting the significance of a thorough and well-reasoned decision-making process.