2022 (3) TMI 1319 - HC - Central Excise

Maintainability of appal - Monetary limit involved in the appeal - CENVAT Credit - supply of MS Platform at the site - credit can be availed or not as the component of the electronic weigh bridge (MS Platform) was not received in the petitioner's factory, but were sent directly to the customers' site for Erection and Commissioning - HELD THAT - The demands for the respective periods, was beyond the monetary limit and technically there was no bar for the Authority to have filed appeals and to take up the matter before the higher adjudicating Authorities. In light of a finding of law and facts which is identical and has been a subject matter of earlier orders between the same assessee and the Department, it was not open for the second respondent to ignore such orders and pass an order contrary to the conclusion arrived at, as has been done in the order in original at Annexure - A. Hon'ble Apex Court in UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. 1991 (9) TMI 72 - SUPREME COURT , has clarified, that once there is an order by the Superior Authority, the Authorities low down in the hierarchy which may be adjudicating Authorities, are to give effect to the orders of the Authorities higher to them in the hierarchy. It is further to be noted that the learned counsel for the Revenue Authority is not in a position to controvert the assertion of the petitioner that the question involved and decided in the orders at Annexures - B, C and D were identical in the facts and in law as was being considered in the proceedings leading to the passing of the Order-in-Original at Annexure-A. Normally, the Court would have remanded the matter back to the Authority for fresh consideration in light of observations made - However, in the present case, if the conclusion at Annexures - B, C and D are to be made applicable with respect to the period which was subject matter of proceedings culminating in the Order-in- Original, there could be nothing more that could be done by the second respondent except in accepting the conclusion as per the orders at Annexures - B, C and D. Thus, though the supply of MS platforms is directly to the customers' site, as the said component is used in the manufacture of the final product on which duty of excise is discharged, the petitioners are eligible for the credit on MS Platforms used for the manufacture of weigh bridges. Petition allowed.

Summary

Issues Involved:
1. Legality of the Order-in-Original dated 31.12.2019.
2. Eligibility for CENVAT credit on MS Platforms not received in the factory but sent directly to the customers’ site.
3. Binding nature of previous Tribunal orders (Annexures B, C, and D) on the adjudicating Authority.

Detailed Analysis:

1. Legality of the Order-in-Original dated 31.12.2019:
The petitioner sought to quash the Order-in-Original dated 31.12.2019, which raised a demand for disallowance of CENVAT credit on the grounds that MS Platforms were not received in the petitioner’s factory but sent directly to the customers' site. The petitioner argued that this order was contrary to previous Tribunal orders (Annexures B, C, and D) which had allowed similar claims for different periods. The Tribunal had previously ruled that inputs not received directly in the factory but sent to the site were eligible for CENVAT credit.

2. Eligibility for CENVAT credit on MS Platforms not received in the factory but sent directly to the customers’ site:
The petitioner contended that the MS Platforms, part of the weigh bridge, were procured from independent fabricators who paid duty on these platforms before supplying them directly to the customers' site. The petitioner argued that they were entitled to CENVAT credit for these inputs as per the Tribunal's previous rulings. The Tribunal had established that inputs sent directly to the site and included in the final product's value, on which duty was paid, were eligible for CENVAT credit.

3. Binding nature of previous Tribunal orders (Annexures B, C, and D) on the adjudicating Authority:
The petitioner emphasized that the adjudicating Authority was bound by the Tribunal's previous orders (Annexures B, C, and D), which had addressed similar issues for different periods. The Tribunal had consistently ruled in favor of allowing CENVAT credit for inputs sent directly to the site. The petitioner referenced the Supreme Court's decision in Union of India Vs. Kamlakshmi Finance Corporation Limited, which clarified that lower authorities must follow the orders of higher authorities in the hierarchy. The petitioner argued that the adjudicating Authority’s failure to consider these binding precedents was erroneous.

Conclusion:
The High Court noted that the issues raised in the current proceedings were identical to those addressed in the Tribunal's previous orders (Annexures B, C, and D). The Court emphasized that the adjudicating Authority should have followed the established legal position and previous rulings. The Court found that the Tribunal's orders were binding and that the adjudicating Authority's decision to deny CENVAT credit was not justified. Consequently, the High Court allowed the writ petition, setting aside the Order-in-Original dated 31.12.2019, and affirmed the petitioner’s eligibility for CENVAT credit on MS Platforms used in the manufacture of weigh bridges.