2014 (9) TMI 332 - HC - Central Excise

CENVAT Credit - Whether the services which have been availed of could be said to be input services within the meaning of Rule 2(l) of the Cenvat Credit Rules, 2004 - Held that - When we were taken through the definition of the term input service and the facts in the present case, that we found that none of these aspects have been considered by the Tribunal. The Tribunal merely proceeds on the footing that being an exporter, all services have been availed of during the course of export of goods and that is how this Cenvat credit was admissible. Which of the services during the course of export availed of by the present assessee would be covered by this definition and the judgment of this Court has not been considered or decided by the impugned order. Such unsatisfactory and unhappy disposal of Appeals in matters of Revenue and Taxes therefore leaves a lot to be desired. The expectation given from the Appellate Tribunal is therefore not fulfilled and particularly when it is manned by persons drawn from judicial services. In these circumstances, we have no alternative but to allow this Appeal only on this short, but substantial question of law and that is that the Appeals cannot be disposed merely by recording rival submissions and not discussing them elaborately but, in a perfunctory manner. The impugned order is therefore quashed and set aside - Decided in favour of Revenue.

Summary

Issues:
1. Challenge to the order passed by the Customs Excise and Services Tax Appellate Tribunal, West Zonal Bench at Mumbai.
2. Disposal of the appeal without consent of the Revenue.
3. Interpretation of the term "input services" under Rule 2(l) of the Cenvat Credit Rules, 2004.
4. Requirement of detailed reasoning in appellate orders.
5. Quashing and setting aside of the impugned order.

Analysis:
1. The appeal challenges the order passed by the Customs Excise and Services Tax Appellate Tribunal, where the respondent-assessee filed an appeal against the Commissioner of Central Excise, Thane-1. The Tribunal disposed of the appeal finally, leading to a challenge before the High Court.

2. The appellant argued that the disposal of the appeal lacked the Revenue's full consent, raising a substantial question of law. The Tribunal's failure to discuss rival cases and findings adequately was highlighted, leading to errors in setting aside the Commissioner's order.

3. The main issue revolved around whether the services availed, such as export sales commission and bank charges, qualified as "input services" under the Cenvat Credit Rules. The definition of "input services" was crucial, and the appellant contended that the services in question did not fall within this definition, thus challenging the Tribunal's decision.

4. The High Court emphasized the importance of detailed reasoning in appellate orders, citing precedents that stressed the need for quasi-judicial authorities to provide clear and explicit reasons for their decisions. The Court highlighted that appellate bodies must independently analyze facts, legal provisions, and cited decisions to ensure a fair and thorough review process.

5. Ultimately, the High Court found the Tribunal's order lacking in detailed reasoning and satisfactory conclusions. The Court quashed and set aside the impugned order, restricting it to the stay application only. The appeal was restored to the Appellate Authority/Tribunal for proper disposal in accordance with the law, emphasizing the necessity of thorough consideration and independent decision-making in appellate proceedings.