2018 (8) TMI 1675 - AT - Central Excise

CENVAT credit - input services - courier services availed for import of inputs and export of finished goods - rent paid on job workers premises - demand along with interest and penalties. Remand of matter by Commissioner(Appeals) - power of Commissioner(Appeals) to remand - Held that - The Commissioner(Appeals) has allowed the appeals of the appellant on merits but still remanded the matter back to the original adjudicating authority for de novo adjudication which is not legally justified because the Revenue has not filed appeal against the impugned order on merit - further, the Commissioner has still the power of remand in exceptional circumstances where it is required for the purpose of quantification of the demand or where the original authority has passed orders without complying with the principles of natural justice. But the Commissioner(Appeals) should not have exercised the power of remand in the circumstances as prevailing in the present case - the power of remand exercised by the Commissioner(Appeals) is not legally sustainable in the present case. Courier services availed for import of inputs and export of finished goods - Held that - The courier service availed by the appellant fall in the definition of input service as contained in Rule 2(l) of CCR 2004 - credit allowed. Rent paid on job workers premises - Held that - CENVAT Credit on rent paid on job worker premises has been allowed on the ground (a) Rule 3(1) of the CENVAT Credit Rules, 2004 specifically provided for availment of CENVAT Credit by a manufacturer or producers of final products in respect of any, discharge of duties or taxes or cess paid on any input or input services used in the manufacture of intermediary products, by a job worker availing benefit of exemption specified in the N/N. 214/86-CE - Further, the rent paid is essential service directly in relation to the manufacture and once the Commissioner(Appeals) himself allowed it on merit, then thereafter remanding the case back to the original aurhority is not legally sustainable. The impugned order remanding the matter back to the original authority is not sustainable in law - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Thirteen appeals filed against a common order remanding all appeals for de novo consideration. Denial of CENVAT credit on courier services for import/export and on rent paid on job workers' premises.

Analysis:

Issue 1: Remand of Appeals
The Commissioner(Appeals) remanded 11 appeals for de novo consideration after allowing them on merits. The appellant argued that the Commissioner(Appeals) lacked the power to remand post the 2001 amendment to Section 35A(3) of the Central Excise Act. Citing various judgments, the appellant contended that remand caused undue hardship and was unjustified. The Tribunal concurred, stating that the remand was not legally justified as the Revenue did not appeal on merit. The Commissioner(Appeals) lacked the power to remand in this scenario.

Issue 2: Denial of CENVAT Credit on Courier Services
The appellant sought CENVAT credit for courier services under Rule 2(l) of the CENVAT Credit Rules, 2004, citing relevant case laws. The Tribunal agreed, stating that courier services qualify as input services for manufacturing. The denial was deemed unjustified.

Issue 3: Denial of CENVAT Credit on Rent
Regarding denial of CENVAT credit on rent paid for job workers' premises, the Commissioner(Appeals) allowed the appeals on merits but remanded them. The Tribunal found this remand unnecessary as a prior favorable decision existed for the appellant. Rule 3(1) of the CENVAT Credit Rules, 2004 allowed such credit, and the rent was directly related to manufacturing. The remand was deemed legally unsustainable.

Conclusion
The Tribunal held that the remand order was unsustainable, setting it aside and allowing the appeals with consequential reliefs. The Commissioner(Appeals) was noted to retain remand powers only in exceptional circumstances, not applicable in this case. The decisions on CENVAT credit for courier services and rent were in favor of the appellant, leading to the appeals being allowed.