2022 (5) TMI 711 - AT - Central Excise

Maintainability of appeal - monetary amount involved in the appeal - CENVAT Credit - input services or not - sales commission paid to one M/s. Supreme Packaging with whom, agreement is entered upon, to appoint them as Del Credere Agent for effective proper guarantee of solvency of customers and effective recovery of money - post clearance services or not - HELD THAT In fact the amount of duty involved in the present appeal is Rs.1,46,148/- which is less than the prescribed limit of Rs.2 lakhs and the appeal can be dismissed as non-maintainable, in view of the low amount involved and as per proviso to Section 35 B (1) of the Central Excise Act, 1944 the Tribunal could refuse to admit appeal involving such low amount. Admissibility of CENVAT Credit in respect of Del Credere Agent Services , received by Appellants - HELD THAT - They had appointed M/s. Supreme Packaging as Del Credere Agent , to guarantee the solvency of their customer and ensure speedy recovery of the amounts due from them. These service are in relation to the activities which are post sale and clearance of goods and hence these cannot be treated as input services for the manufacture of goods cleared by the appellants from their factory. The appeal is dismissed as not admitted as well as on merits.

Summary

Issues:
1. Admissibility of CENVAT Credit on post clearance services.
2. Applicability of Section 35B(1) proviso to dismiss appeal.
3. Failure of the Appellant to appear for the hearing.

Admissibility of CENVAT Credit on post clearance services:
The appeal concerned the admissibility of CENVAT Credit on services provided by a 'Del Credere Agent' for guaranteeing solvency and ensuring recovery of dues post-sale. The Revenue contended that since these services were post-clearance, the credit availed should be denied. The Superintendent confirmed the demand for recovery of Rs.1,46,148 under CCR, 2004 and Section 11A(1) of the Central Excise Act, 1944. The Commissioner (Appeals) upheld this decision. The Tribunal found that these post-sale services did not qualify as input services for manufacturing goods, citing a previous decision where a similar credit claim was disallowed. Consequently, the appeal was dismissed on merits.

Applicability of Section 35B(1) proviso to dismiss appeal:
The Tribunal noted that the amount involved in the appeal was Rs.1,46,148, below the Rs.2 lakh limit prescribed by Section 35B(1) for maintaining an appeal. As per the proviso, the Tribunal could refuse to admit appeals involving such low amounts. Therefore, the Tribunal considered dismissing the appeal as non-maintainable based on the amount involved, as per the statutory provisions outlined in Section 35B. Ultimately, the appeal was dismissed on the grounds of non-maintainability due to the low amount in question.

Failure of the Appellant to appear for the hearing:
The Appellant failed to appear for the hearing on three separate occasions, leading to the matter being heard ex-parte. The Tribunal highlighted the provision under Section 35C(1A) of the Central Excise Act, 1944, which allows adjournments for sufficient cause but limits them to three times for a party during the appeal hearing. As the Appellant did not attend any of the scheduled hearings, the Tribunal proceeded with an ex-parte hearing. The Authorized Representative for the Revenue presented arguments, emphasizing that the appeal should not be admitted due to the low amount involved and that the issue was decisively settled by a previous Tribunal decision. The Tribunal, considering the lack of appearance by the Appellant and the arguments presented, dismissed the appeal both on grounds of non-maintainability and on merits.

This comprehensive analysis of the legal judgment covers the issues of admissibility of CENVAT Credit, applicability of Section 35B(1) proviso, and the failure of the Appellant to attend the hearing, providing a detailed understanding of the Tribunal's decision and the legal reasoning behind it.