2019 (4) TMI 906 - AT - Service Tax

Review of the order - Utilization of CENVAT Credit - whether credit on input/capital goods used for manufacturing excisable goods could be utilized for payment of Service Tax on the output services? - Applicable rate of service tax - Held that - There is no substance in the submission advanced by learned Authorized Representative of the Department that the High Court had directed the Tribunal to hear the appeals on merits afresh and even otherwise the only power conferred upon a Tribunal, after a decision is rendered in an appeal is to rectify any mistake apparent from the record under Section 35(2) of the Act. The Tribunal does not have the power to even review an order, much less to hear the appeal afresh on merit. Rule 41 on which the reliance has been placed by the learned Authorized Representative of the Deprtment provides that the Tribunal may make such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. This Rule, therefore, cannot come to the rescue of the Department to make a prayer for a fresh decision. Application dismissed.

Summary

Issues:
1. Whether Cenvat Credit for input/capital goods used in manufacturing excisable goods can be utilized for paying Service Tax on output services?
2. What is the applicable rate for levying Service Tax?

Analysis:
1. The Tribunal had initially decided that Cenvat Credit for input/capital goods used in manufacturing could be utilized for paying Service Tax on output services. The rate of Service Tax applicable was determined as per the dates in force. The appeal by one party was allowed, and the impugned order was set aside, while the appeal by another party was partly allowed with modifications in the order.
2. Subsequently, the Department filed appeals before the High Court against the Tribunal's order, seeking to withdraw the appeals to file appropriate applications before the Tribunal. The High Court permitted the withdrawal of appeals. A Review Petition was also filed by the Department, which was disposed of with observations regarding the time consumed in filing appeals and review petitions.
3. The Department later filed Miscellaneous Applications before the Tribunal, citing reasons related to arguments not raised previously and seeking a review of the Tribunal's final order. The Department contended that the Tribunal should reconsider the matter based on observations by the High Court.
4. The Department argued that the Miscellaneous Applications were maintainable under Rule 41 of the Tribunal's Procedure Rules, emphasizing the direction by the High Court to deal with the matter on merits. However, the Appellant's Counsel opposed the maintainability of the applications, stating they sought a fresh hearing, which is impermissible in law.
5. The Tribunal, after considering submissions, highlighted that its power under Section 35C(2) of the Act is for rectification of mistakes apparent from the record. The Tribunal clarified that it does not have the authority to review an order or hear an appeal afresh on merit. Rule 41 cannot be used to request a fresh decision.
6. Consequently, the Tribunal rejected the Miscellaneous Applications filed by the Department, deeming them misconceived. The Tribunal clarified that its role is limited to rectifying mistakes apparent from the record and not to reconsider matters on merit, as sought by the Department.

This detailed analysis outlines the progression of the case, including decisions by the Tribunal and High Court, the Department's appeals and review petition, and the Tribunal's rejection of the Miscellaneous Applications, emphasizing the limitations of the Tribunal's powers in such matters.