2020 (8) TMI 57 - HC - Central Excise

Jurisdiction - power to remand the case to authority for fresh adjudication after taking additional evidence - CENVAT Credit - credit for the same services allowed for previous years/period - input services - Manpower, Fabrication Erection services - WCT SERTX services - Repairs Maintenance service - interpretation of definition of input services - initiation of Recovery Proceedings on completely wrong implication of law - HELD THAT - The assessee having lost the opportunities before the three authorities below, namely the Assessing Authority, the Commissioner of Central Excise (Appeals) as well as Tribunal, all of them being fact finding body and who could have allowed such evidence to be brought on record by the assessee to examine the claim of CENVAT Credit of the assessee on merits, the only submission which has impressed us a little bit is that such claim in favour of the assessee was allowed by the authorities below in the previous period. Though no such evidence is placed by the assessee, there is no reason to disbelieve this statement of the learned counsel for the assessee and the same is also not controverted by the learned counsel for the Revenue with some evidence. Instead of answering the question at this stage, without there being findings on the merits of the claim of the assessee by the authorities below, it would be appropriate to remand the case to the First Appellate Authority, namely the Commissioner of Central Excise (Appeals), subject to payment of cost of ₹ 50,000/- by the appellant/assessee company to the respondent Department. The said contribution of ₹ 50,000/- may be deposited within a period of four weeks from today - appeal disposed off.

Summary

Issues:
1. Exercise of powers by the Tribunal under Section 35C
2. Disallowance of Cenvat Credit
3. Interpretation of the definition of "Input Service"

Analysis:

Issue 1: Exercise of powers by the Tribunal under Section 35C
The appellant raised concerns regarding whether the Tribunal properly exercised its powers under Section 35C, particularly in terms of remanding the matter for fresh adjudication after taking additional evidence. The appellant argued that due to lapses on their part and their representatives, relevant evidence supporting the input tax credit claim was not presented before the lower authorities. The Tribunal was urged to remand the case back to the Commissioner of Central Excise (Appeals) to allow the submission of the necessary evidence. The Court acknowledged the appellant's contention and decided to remand the case to the First Appellate Authority, requiring the appellant to pay a cost of ?50,000 to the respondent Department.

Issue 2: Disallowance of Cenvat Credit
The dispute also revolved around the disallowance of Cenvat Credit by the Tribunal and lower authorities. The appellant argued that they possessed relevant evidence to support their claim, which if presented, would justify the allowance of Cenvat Credit. The appellant highlighted that similar credit had been allowed for previous periods. The Court noted the absence of such evidence before them but considered the appellant's assertion regarding credit allowance in prior periods. Consequently, the Court decided to set aside the previous orders and restore the appeal to the Commissioner of Central Excise (Appeals) for a fresh decision based on merits and in accordance with the law.

Issue 3: Interpretation of the definition of "Input Service"
Another point of contention was the interpretation of the definition of "Input Service" under Rule 2(1) of the Cenvat Rules. The appellant argued that the authorities had erroneously interpreted the definition without considering its non-exhaustive nature. The Court, while refraining from addressing this issue directly, emphasized the importance of establishing findings on the merits of the claim before making a conclusive determination. The Court opted to remand the case to the Commissioner of Central Excise (Appeals) for a thorough examination of the evidence and subsequent decision.

In conclusion, the Court's judgment focused on the necessity of presenting relevant evidence to support claims, the proper exercise of tribunal powers, and the importance of factual findings before addressing legal questions. The case was remanded for further examination, emphasizing the need for a comprehensive review of the evidence to determine the merits of the appellant's claims regarding Cenvat Credit.