2018 (7) TMI 1597 - HC - Central Excise

Maintainability of appeal - monetary amount involved in the appeal - CENVAT Credit - Held that - In the present appeal the amount involved is ₹ 12,71,048/- - In terms of the Instructions issued by the Central Board of Indirect Taxes & Customs dated 11.7.2018, the monetary limit fixed for filing appeals in the High Court stands raised to ₹ 50 lakhs, which is applicable even in pending cases. As the amount of tax involved in the present appeal is less than ₹ 50 lakhs, the same is dismissed as not maintainable - appeal dismissed being not maintainable.

Summary

Issues Involved:
1. Entitlement to avail CENVAT credit on various services without nexus to manufacturing.
2. Validity of dismissing the appeal based on pending judgments.
3. Liability for recovery of CENVAT credit under relevant rules.
4. Liability for penalty under CENVAT Credit Rules.
5. Recoverability of interest on inadmissible CENVAT credit.

Entitlement to CENVAT Credit on Services without Nexus to Manufacturing:
The appeal questioned the entitlement of the respondent to avail CENVAT credit on services like Insurance, Gardening, Network Detection, Manpower, Export, Repair & Maintenance, and Software, which were argued to have no nexus with manufacturing. The central issue was whether these services could be considered as input services for the purpose of claiming CENVAT credit. The Tribunal's decision was challenged on the grounds of nexus with manufacturing activities.

Validity of Dismissing Appeal Based on Pending Judgments:
Another substantial question raised was whether the Tribunal erred in dismissing the appeal of the appellant department by relying on judgments that were not finalized and were under challenge before the Supreme Court. The concern was regarding the appropriateness of relying on unsettled legal precedents in deciding the case at hand.

Liability for Recovery of CENVAT Credit:
The judgment also delved into the aspect of whether the CENVAT credit availed by the respondent was subject to recovery under Rule 14 of the CCR-2004 along with the provisos to Section 11A(1) and Section 11AB of the Central Excise Act, 1944. The issue revolved around the legal provisions governing the recovery of CENVAT credit in cases where it was deemed inadmissible.

Liability for Penalty under CENVAT Credit Rules:
Furthermore, the judgment examined whether the respondent had incurred liability for penalty under Rule 15 of the CENVAT Credit Rules, 2004 in conjunction with Section 11AC of the Central Excise Act, 1944. The question of imposing penalties for any contraventions or non-compliance with the CENVAT Credit Rules was a pivotal aspect of the case.

Recoverability of Interest on Inadmissible CENVAT Credit:
Lastly, the issue of interest leviable on the inadmissible CENVAT credit under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944 was addressed. The judgment scrutinized the provisions related to the imposition of interest on amounts of CENVAT credit that were deemed impermissible or not compliant with the statutory regulations.

In conclusion, the High Court dismissed the appeal on the grounds of the monetary limit fixed for filing appeals, which was below the threshold set by the Central Board of Indirect Taxes & Customs. As the amount involved was less than the prescribed limit, the appeal was deemed not maintainable, leading to the dismissal of the application for condonation of delay in filing the appeal.