2018 (11) TMI 1297 - AT - Service Tax

Rectification of Mistake - mistake apparent from the face of record or not - provision with regard to conducting audit under Service Tax has been held ultra vires by the Hon ble Apex Court. The silence of this Tribunal in the impugned Final Order to this effect - Held that - No case law of Hon ble Apex Court as impressed upon by the appellant about no provisions of audit in Service Tax is placed on record. Perusal of grounds of appeal shows that though the audit note dated 19.11.2010 is objected but Department is not alleged to have wrongly conducted the said audit. The silence in that respect in the impugned final order cannot be held to be an error apparent on record. Time Limitation - Held that - Since it is one of the grounds of the appeal finding no mention in the order adjudicating upon the same is definitely an error apparent on record. In para 8 of the Final Order, ACs for the Server Rooms are held to be the inputs used in providing output service. Perusal of the order of original authority makes it clear that those ACs were also not considered as input as is apparent from last lines of para 15 of the said order. Thus, the order of original adjudicating authority has been modified to include AC s of server room also to be the inputs. Hence, dismissing the appeal altogether is an error apparent on record. Application allowed in part.

Summary

Issues:
1. Rectification of mistake in Final Order regarding conducting audit under Service Tax
2. Error in Final Order regarding time-barred nature of show cause notice
3. Dismissal of appeal despite entitlement to claim Cenvat Credit on specific items

Issue 1: Rectification of mistake in Final Order regarding conducting audit under Service Tax
The appellant argued that the Final Order failed to address the provision regarding conducting audit under Service Tax, which had been declared ultra vires by the Hon'ble Apex Court. They cited Indian Additives Ltd. vs. CCE, Chennai to support their claim that a non-speaking order cannot be sustained. The appellant also contended that the Final Order did not discuss the issue of the time-barred nature of the show cause notice, as the Department was aware of the activities earlier. Additionally, despite acknowledging that certain items were entitled to Cenvat Credit, the appeals were dismissed. The appellant requested rectification based on these grounds. The Tribunal noted that no case law from the Hon'ble Apex Court was presented to support the claim about the absence of provisions for audit in Service Tax. The Tribunal found that the silence in the Final Order regarding the audit did not constitute an error apparent on record.

Issue 2: Error in Final Order regarding time-barred nature of show cause notice
Regarding the issue of limitation, the Tribunal acknowledged that it was a ground of appeal and found that the Final Order did not adjudicate upon it, constituting an error apparent on record. The Tribunal rectified the order by adding observations related to the show cause notice's issuance and the extended period of limitation. The Tribunal concluded that the show cause notice was not time-barred based on the facts and evidence presented.

Issue 3: Dismissal of appeal despite entitlement to claim Cenvat Credit on specific items
The Final Order incorrectly dismissed the appeal despite the appellant being entitled to claim Cenvat Credit on certain items. The Tribunal observed that the original adjudicating authority had not considered certain items as inputs, leading to a modification in the Final Order. The Tribunal rectified the order to allow the appellant to avail Cenvat Credit on the specified items, including ACs for Server Rooms. Consequently, the appeal was partly allowed, and the appellant was granted the consequential benefit. The Tribunal recognized the error in dismissing the appeal and rectified it to provide the appellant with the entitled Cenvat Credit.

In conclusion, the Tribunal partially allowed the application for rectification of the Final Order, addressing the issues raised by the appellant regarding the audit provision, time-barred nature of the show cause notice, and entitlement to claim Cenvat Credit on specific items. The rectification clarified the Tribunal's findings and ensured that the appellant received the appropriate benefits as per the legal provisions and evidence presented during the proceedings.