2016 (12) TMI 1160 - AT - Central Excise

Rejection of credit availed - the appellant was not given any SCN before rejecting the credit availed - Air & smoke monitoring services - Credit rating agency service - Calibration services - Audit services - Dozer and loader hire services - Held that - As per OIO dated 29.07.2009 the service tax credit disallowed to the appellant is with respect to services of outward transportation goods. However, appellant has now taken a fresh ground before this bench that no show cause notice was issued to them and the cenvat credit of ₹ 58,806/- recovered in the order dt. 29.07.2009 by the Adjudicating Authority was with respect to some other services (as mentioned above). As this is a new ground taken by the appellant which was not agitated before the lower authority, therefore, in the interest of justice, by setting aside OIA dated 14.02.2011 passed by the First Appellate Authority, the case is remanded to the Adjudicating Authority for deciding the admissibility of cenvat credit afresh - appellant should be given an opportunity of personal hearing - appeal allowed by way of remand.

Issues: Admissibility of cenvat credit on certain services; Lack of show cause notice before rejecting credit availed.

Admissibility of Cenvat Credit on Certain Services:
The appeal was filed against the Order-in-Appeal passed by the Commissioner, Customs & Central Excise(Appeals), Guwahati. The appellant argued that the credit of ?58,806 for the period May 2009 was denied by the Adjudicating Authority and the First Appellate Authority on the grounds that it pertained to outward transportation of goods. However, the appellant contended that the credit actually pertained to specific input services such as air & smoke monitoring, credit rating agency, calibration charges, audit fee, and dozer and loader hire charges. The appellant requested a remand to the Adjudicating Authority as no show cause notice was issued before rejecting the credit availed. The Adjudicating Authority had disallowed the service tax credit without proper notice. The Tribunal, after hearing both sides and perusing the case records, found that the issue involved was the admissibility of cenvat credit on certain services. The Tribunal noted that the appellant had raised a new ground not previously argued before the lower authority, and in the interest of justice, remanded the case to the Adjudicating Authority for a fresh decision on the admissibility of cenvat credit. It was emphasized that the appellant should be given a personal hearing by the Adjudicating Authority during the remand proceedings. All issues related to the admissibility of cenvat credit on the input services were to be deliberated upon by the Adjudicating Authority. The appeal was allowed by way of remand to the Adjudicating Authority.

Lack of Show Cause Notice Before Rejecting Credit Availed:
The appellant raised the issue that no show cause notice was issued to them before the credit of ?58,806 was denied by the Adjudicating Authority. The appellant argued that they were not given the opportunity to effectively present their case before the First Appellate Authority. The Tribunal acknowledged this argument and decided to remand the case to the Adjudicating Authority for a fresh decision. The lack of proper notice and opportunity for the appellant to be heard before the credit was disallowed was considered a procedural flaw that warranted a remand for a fair adjudication. The Tribunal emphasized the importance of providing the appellant with a personal hearing during the remand proceedings to ensure procedural fairness and the opportunity to present their case effectively.

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