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2023 (1) TMI 1138 - AT - Central ExciseMaintainability of petition - failure to comply with pre-deposit requirement - availment of CENVAT Credit - telecom services in connection with telephones installed at homes of senior functionaries - air travel agent service for booking of airline tickets of senior officials - mandap keeper service for certain conventions and employee sessions - pandal/shamiana service for some functions and event management service - denial on the ground of nexus - HELD THAT - Notices for recovery are issued under the authority of substantive and procedural provisions of Acts and Rules framed thereunder. A noticee is made aware of the detriment in judicial decisions only upon incorporation in the consequent adjudication orders and the specifics mandated in such decisions cited in the adjudication order could not have been factually countered except at the appellate stage. Opportunity had not been afforded to the appellant for doing so in the earlier round that was carried to the Tribunal for dismissal at threshold. Doubtlessly, the appellant did not take advantage of the opportunity to present the applicability, or otherwise, of the decision in CCE VERSUS MANIKGARH CEMENT 2010 (10) TMI 10 - BOMBAY HIGH COURT and their claim of the impugned order having been passed before they could so is not credible defence as the timelines had not been adhered to by them. Nonetheless, several judgments and decisions have been brought to our notice which, owing to lack of finding on fact by lower authorities, cannot be adjudged by us as conforming to, and proper in accordance with, law. Appeals are allowed by way of remand to original authority.
Issues Involved:
Challenge to disallowance of CENVAT credit for alleged lack of nexus with manufacturing activity for specific services availed by the appellant. Analysis: 1. The case involved two appeals by M/s JSW Ispat Steel Ltd challenging the disallowance of CENVAT credit amounting to &8377;27,86,328 for the period from October 2004 to December 2009. The dispute centered around the alleged lack of 'nexus' between the services availed and the manufacturing activity of the appellant. The issue had been remanded by the Tribunal for a fresh adjudication after being dismissed previously due to non-compliance with predeposit requirements. The appellant claimed that the issue had been settled by a decision of the Hon'ble High Court of Bombay in a similar case. 2. The primary issue revolved around the availment of credit on various services, including 'telecom services,' 'air travel agent service,' 'mandap keeper service,' 'pandal/shamiana service,' and 'event management service.' The tax authorities contended that these services did not have a nexus with the manufacturing activity of the appellant as required by the CENVAT Credit Rules, 2004. 3. The appellant relied on previous decisions by the Hon'ble High Court of Bombay and other Tribunal decisions to support their claim of entitlement to the credit for the services in question. They argued that the principles governing the eligibility for availing credit of tax paid on services used for manufacturing activities had been established in previous judgments. 4. The Authorized Representative highlighted that the impugned services did not meet the tests set by previous court decisions due to the lack of submissions by the appellant. He referenced Tribunal decisions that disallowed credit for services not directly used in the manufacturing process. 5. The first appellate authority had dismissed the appeals without examining the submissions made by the appellant. The authority noted the lack of evidence proving the nexus between the disputed services and the manufacturing process. The Tribunal found this dismissal to be inadequate and lacking a thorough examination of the specific services in question. 6. The Tribunal emphasized the importance of following the specific directions given in the remand order. It noted that the appellant had not been given the opportunity to address the issues raised in the adjudication orders at the appellate stage, leading to a lack of factual counterarguments. The Tribunal directed a fresh adjudication by the original authority after verifying the factual submissions made by the appellant. 7. Despite the appellant's failure to take advantage of the opportunity to present arguments regarding previous court decisions, the Tribunal decided that a detailed examination of the principles laid down by the High Court was necessary. The lack of findings on facts by lower authorities necessitated a fresh adjudication to ensure compliance with the law. 8. Ultimately, the appeals were allowed by way of remand to the original authority for a detailed adjudication based on the factual submissions and applicable legal principles. (Order pronounced in the open court on 25/01/2023)
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