2018 (3) TMI 991 - AT - Central Excise

Irregular availment of CENVAT credit - Business Auxiliary Service - the credit was denied only on the basis that the input services were for post-removal and post export activities of the appellant - Held that - The fact that the appellant claimed M/s.Agility Logistics Pvt. Ltd. India having registered office in India provided various services have not been dealt with - the denial of credit was based on the certain assertions and presumptions and not based on any categorization of input services and examination of the provisions of Cenvat Credit Rules, 2004. The appellant did provide details of the services availed by them, which they claimed included the services provided M/s.Agility Logistics Pvt. Ltd. India. The lower authorities did not examine the issue in factual context and proceeded to deny only on the basis of the certain presumptions - appellant shall be provided an adequate opportunity to present their side of the case along with supporting evidences - appeal allowed by way of remand.

Summary

Issues:
1. Demand and recovery of irregularly availed credit under "Business Auxiliary Service" for automobile parts liable to central excise duty.
2. Allegations of lack of clarity in proceedings and denial of credit based on post-removal and post-export activities.
3. Appellant's cooperation with details called for and the adequacy of the show cause notice.

Analysis:
1. The appeal challenged the order of the Commissioner (Appeals) regarding the demand and recovery of irregularly availed credit under the category of "Business Auxiliary Service" for automobile parts subject to central excise duty. The appellant contested the demand, arguing that crucial aspects, such as services provided by M/s. Agility Logistics Ltd., India, were not considered. The lower authorities confirmed the proposal in the notice along with a penalty.

2. The appellant's counsel highlighted the lack of clarity in the proceedings, emphasizing that services provided after the removal of goods were deemed ineligible for credit. The impugned order was criticized for confirming the denial of credit based on various grounds despite acknowledging infirmities in the show cause proceedings. The Tribunal noted that the denial of credit was primarily due to input services being utilized for post-removal and post-export activities, with the show cause notice lacking specificity and failing to substantiate the allegations adequately.

3. The appellant's lack of cooperation with the details called for was raised by the Revenue, arguing that the show cause notice was issued based on available particulars provided by the appellant. However, the appellant's submission of different facts during the proceedings was deemed untenable. The Tribunal found that the impugned order extensively discussed flaws in the show cause notice but ultimately denied credit based on presumptions regarding the services provided by M/s. Agility AB Sweden, without factual support. The lack of examination of the issue in a factual context led to the setting aside of the order and remanding the matter back to the Original Authority for a fresh review, allowing the appellant an opportunity to present supporting evidence within the scope of the notice issued against them.