2010 (2) TMI 455 - AT - Service Tax

Cenvat Credit - a show-cause notice, the original authority had confirmed demand of duty of Rs. 27,233 against the assessee by way of denial of CENVAT credit on rent-a-cab operators services to them, under section 11A(1) of the Central Excise Act. It also imposed a penalty of Rs. 2,000 on the assessee, besides charging interest on the aforesaid amount of duty. Assessee filed an appeal before Commissioner (Appeals) along with the application of condonation of delay. Held that - since cenvat credit in question was taken and utilized by assessee as manufacturer of excisable goods and assessee was not provider of output services, order passed by the adjudicating authority only appealable under section 35 of Act and not under section 85 of the Act. Further held that - since under proviso to section 35(1) of Act appellate authority can condone delay of appeal upto 30 days only beyond period of 60 days since instant appeal against order in original was filed far beyond period of 90days, delay was not condonable.

Summary

Issues:
1. Condonation of delay in filing appeal under Central Excise Act vs. Finance Act, 1994.
2. Applicability of CENVAT Credit Rules, 2004 in dispute resolution.
3. Jurisdiction of Commissioner (Appeals) to condone appeal delay beyond statutory limits.

Analysis:

Issue 1: Condonation of Delay
The appeal raised a question of law regarding the condonation of delay in filing an appeal under the Central Excise Act. The original authority confirmed a demand of duty against the assessee, who filed an appeal beyond the prescribed period. The main contention was whether the Commissioner (Appeals) had the authority to condone the delay under the Finance Act, 1994, instead of the Central Excise Act. The revenue argued that the appeal should have been filed within 60 days under the Central Excise Act, and any delay beyond that was not condonable. The Commissioner (Appeals) had erroneously applied the provisions of the Finance Act, 1994, leading to the present appeal by the revenue.

Issue 2: Applicability of CENVAT Credit Rules
The dispute involved the interpretation of the CENVAT Credit Rules, 2004 in resolving the issue of irregular availment/utilization of CENVAT credit. The revenue contended that the case fell under the Central Excise Act as the credit was utilized for excisable goods, while the respondent argued it was a Service Tax dispute under the Finance Act, 1994. The rules invoked for recovery of CENVAT credit and imposition of penalties differed based on the utilization of credit, highlighting the importance of correctly identifying the applicable law for dispute resolution.

Issue 3: Jurisdiction of Commissioner (Appeals)
The judgment clarified the jurisdictional limits of the Commissioner (Appeals) in condoning appeal delays. It emphasized that the appellate authority could only condone delays up to 30 days beyond the prescribed period under the Central Excise Act. Citing a Supreme Court judgment, the court reiterated that the appellate authority had no power to allow appeals beyond the specified period. In this case, the delay in filing the appeal was beyond the condonable period, rendering the lower appellate authority's decision to entertain the appeal without jurisdiction.

In conclusion, the judgment highlighted the importance of correctly applying the relevant legal provisions in dispute resolution and emphasized the jurisdictional limits of appellate authorities in condoning appeal delays. The decision favored the revenue, emphasizing the need for adherence to statutory timelines and appropriate legal frameworks in resolving disputes under the Central Excise Act.