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2023 (1) TMI 1182 - AT - Central ExciseCENVAT Credit - availment of input services for the taxable and exempted services - non-maintenance of separate records - whether credit of input services in respect of the Tower/Buildings were not admissible to the assessee post issuance of completion certificate? - gross violation of Rule 6(1) of the Cenvat Credit Rules 2004 or not - HELD THAT - There are various findings of fact recorded by the Ld. Commissioner (Appeals). One of the findings of fact recorded by the Commissioner (Appeals) is in paragraph 13 says The respondent vehemently objected to the remand made by the Ld. Commissioner (Appeals). However the respondent without challenging the impugned order by filing an appeal or cross objection can not seek the quashing of the direction of the Ld. Commissioner (Appeals) for remand for requantification. Hence the submission of the respondent in this regard is rejected. Further it is found that the Ld. Commissioner (Appeals) decided the subject disputed matter on the basis of judgment of THE PRINCIPAL COMMISSIONER VERSUS M/S ALEMBIC LTD. 2019 (7) TMI 908 - GUJARAT HIGH COURT and grievance of the revenue is that departmental appeal is pending against the decisions of said order. In these circumstances the matter should be remanded to the original adjudicating authority to decide the matter afresh. Appeal allowed by way of remand.
Issues:
Reversal of Cenvat Credit on unsold units post completion certificate issuance. Analysis: The appeal was filed by the Revenue against the Order-in-Appeal dated 02.06.2022 passed by the Commissioner (Appeals), Surat. The case involved a situation where the respondent had constructed flats in a project named "Atlantis," with some flats sold before the completion certificate (BUC) was issued, and the rest unsold post-BUC. The Revenue contended that the respondent should reverse the Cenvat credit on unsold units after BUC issuance. The Commissioner (Appeals) allowed the respondent's appeal, leading to the present appeal by the Revenue. The Revenue argued that the respondent availed Cenvat credit for both taxable and exempted services without maintaining separate accounts, violating Rule 6 of the Cenvat Credit Rules, 2004. They emphasized that the respondent failed to follow the prescribed procedure for reversing Cenvat credit post-BUC issuance, necessitating the reversal as per Rule 6(3) of the Rules. Moreover, the Revenue highlighted the legal position that if the law prescribes a specific manner of action, it must be followed accordingly, citing the case of JK Housing Board vs. Kunwar Sanjay Kishan Kaul. They also pointed out that the judgment in Principal Commissioner vs. Alembic Ltd. held that post-BUC issuance, the sale of residential units became "non-service," making the Cenvat credit inapplicable. The Revenue contended that allowing Cenvat credit in such circumstances was erroneous, as the benefit should not extend to activities classified as non-service. The respondent, represented by an advocate, relied on the decision in M/s Alembic Ltd. to argue that the issue of reversing Cenvat credit on unsold units post-BUC had been settled in their favor. They noted that the Supreme Court had not granted a stay on the matter, making the Alembic decision applicable. The respondent also contested the remand by the Commissioner (Appeals), asserting that they had not availed any Cenvat credit post a specific date, urging the dismissal of the appeal. After hearing both parties, the Tribunal observed that the matter was remanded solely for quantification by the Commissioner (Appeals). The Tribunal rejected the respondent's objection to the remand, emphasizing that without challenging the order through an appeal, the objection could not stand. Additionally, the Tribunal decided to remand the matter to the original adjudicating authority in light of pending departmental appeals, keeping all issues open for consideration without expressing any opinion on the merits. In conclusion, the appeals were allowed by remanding the matter to the original adjudicating authority, with a clear directive to decide afresh based on the outcome of the pending departmental appeals. The Tribunal clarified that no opinion on the merits was expressed, leaving all issues open for further consideration.
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