2018 (6) TMI 876 - AT - Central Excise

CENVAT credit - maintenance and repair service - royalty - denial on the ground that the said services were not used exclusively by the appellant in or in relation to their plant at Shahjahanpur but also related to other plants of Videocon group situated at different locations in India / or other manufacturers - Held that - Revenue has filed the present appeal in a mechanical manner without due application of mind. Infact, it no where stand contended by the Revenue that earlier order has been appealed against by them - there is no infirmity in the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Disallowance of Cenvat credit on service tax for maintenance and repair services.
2. Applicability of earlier Tribunal order in the same assessee's case.
3. Revenue's appeal against the Commissioner (Appeals) order.

Issue 1: Disallowance of Cenvat credit on service tax for maintenance and repair services:
The appellant, engaged in manufacturing refrigerators, was alleged to have wrongly availed Cenvat credit on service tax for maintenance and repair services not exclusively related to their plant. The adjudicating authority disallowed the credit, ordered recovery with interest, and imposed penalties. However, the Commissioner (Appeals) set aside this decision, citing a previous CESTAT order that upheld the appellant's right to the credit. The Commissioner found no infirmity in the appellant's actions and rejected the Revenue's appeal.

Issue 2: Applicability of earlier Tribunal order in the same assessee's case:
The Commissioner noted that the Tribunal's earlier order in the same assessee's case had allowed the appeals and set aside previous orders related to the Cenvat credit issue. The Commissioner emphasized that the Tribunal's decision in the earlier orders was fully applicable unless reversed by a higher appellate forum. The Revenue failed to address the applicability of the earlier Tribunal order in their appeal, leading to the rejection of their appeal due to a lack of proper contention or challenge to the previous decision.

Issue 3: Revenue's appeal against the Commissioner (Appeals) order:
The Revenue's appeal was based on the original grounds of the Show Cause Notice without addressing the Tribunal's earlier order favoring the appellant. The Commissioner found the Revenue's appeal lacking due application of mind, as it did not contest the previous Tribunal decision or provide any grounds for challenging it. Consequently, the Commissioner rejected the Revenue's appeal, upholding the decision in favor of the appellant based on the precedent set by the earlier Tribunal order.

In conclusion, the judgment by the Commissioner (Appeals) favored the appellant, upholding their right to the Cenvat credit on service tax for maintenance and repair services. The decision was supported by the Tribunal's earlier order in the same assessee's case, which the Revenue failed to challenge effectively in their appeal. The legal principles of judicial discipline and the binding nature of previous Tribunal decisions were crucial in determining the outcome of the case, leading to the rejection of the Revenue's appeal.