2016 (10) TMI 461 - HC - Service Tax

Cenvat Credit - eligible input services - Delay in filing appeal before Commissioner (appeals) - Maintainability of writ petition - Held that - the service rendered by AHPL to the petitioner in the capacity of full-fledged Operator of the Hotel and arranging catering, rooms and thereby promoting hospitality service of the Five Star Hotel comparable standards. Secondly, service rendered by AHPL cannot be allowed as eligible input service for the petitioner so as to provide the relief in terms of Rule 6(5) of the Cenvat Credit Rules. The findings rendered by the second respondent is perfectly justified and valid. The present challenge to the order-in-original passed in 2010, has to necessarily fail. This conclusion is supported by the following reasons. Firstly as set out in the preceding paragraphs, the petitioner had exercised the option of filing an appeal, but they were not diligent in prosecuting the matter by filing the appeal within the period of limitation. Admittedly, the appeal was filed beyond the condonable limit. When they filed the previous Writ Petition, merits of the petition was canvassed, therefore, once over again the petitioner cannot be allowed to raise the same grounds and the petitioner is estopped from doing so. Writ petition dismissed - Decided against the assessee.

Summary

Issues:
Challenge to order disallowing Cenvat Credit, delay in filing appeal, jurisdiction to condone delay, challenge to order-in-original, manifest errors in order, natural justice compliance, merits of assessment, estoppel, extended period of limitation, denial of input credit, factual errors in order.

Analysis:
1. The petitioner challenged an order disallowing Cenvat Credit and demanding the same under Cenvat Credit Rules and Finance Act. The appeal to the Commissioner was filed late, leading to rejection due to exceeding the statutory limitation period. The petitioner did not further appeal to the CESTAT, resulting in a recovery notice issued by the Department.

2. The Hon'ble Division Bench dismissed the Writ Appeal, stating that special laws like the Finance Act do not allow for condonation of delay beyond the specified limit. The High Court cannot direct the appellate authority to consider the appeal on merits, as it would be akin to extending the limitation period.

3. The petitioner attempted to challenge the order-in-original after several failed attempts before the Appellate Authority and the High Court. The petitioner contended that the order suffered from manifest errors and invoked the decision in Nizam Sugar Factory case to argue against the extended limitation period.

4. The Revenue argued against the belated challenge, stating that natural justice principles were followed, and the petitioner failed to make a case for interference. The order-in-original was passed based on proper investigation and consideration of objections.

5. The Court concluded that the challenge to the 2010 order-in-original must fail due to the petitioner's lack of diligence in prosecuting the matter within the limitation period. The petitioner's previous Writ Petition and Appeal extensively covered the merits of the assessment, precluding a second round of litigation on the same grounds.

6. The findings in the order-in-original were deemed valid, with the second respondent justifying the denial of input credit based on misleading information provided by the petitioner. The failure to comply with Cenvat Credit Rules and declaration requirements further supported the decision.

7. The Court rejected the petitioner's contentions regarding factual errors in the order, emphasizing that the second respondent's findings were based on the failure to provide necessary documentation and declare services correctly.

8. Ultimately, the Court dismissed the Writ Petition, citing lack of grounds to interfere with the impugned order and highlighting the attempt as a resurrection of a stale claim barred by principles of estoppel. The petitioner failed to establish a case for challenging the order-in-original.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the Court's reasoning leading to the dismissal of the Writ Petition.