2023 (3) TMI 1008 - HC - Central Excise

Maintainability of petition - availability of alternative remedy by way of a statutory appeal - denial of Input Tax Credit (ITC) in respect of the removal of goods on stock transfer basis to their own Units at Jamshedpur and Uttarakhand - ITC on outward transfer for removal of goods from the appellant's factory to the customer premises - grant of personal hearing was not acceded to on the premise that the very same issue was pending consideration before this Court - violation of principles of natural justice. ITC on stock transfer basis to the appellant's factory - HELD THAT - The issue now stands resolved by a decision of a Division Bench of this Court in M/S. ALKRAFT THERMOTECHNOLOGIES (PVT.) LTD. VERSUS COMMISSIONER OF CENTRAL GST AND CENTRAL EXCISE 2019 (9) TMI 328 - MADRAS HIGH COURT , wherein in respect of the very same appellant herein (i.e. M/s.Alkraft Thermotechnologies (Pvt). Ltd.), it was found by the Division Bench of this Court that service tax paid by the appellant-assessee on transport of its goods by way of stock transfer from Chennai to Jamshedpur would be eligible for CENVAT Credit - Insofar as the GTA (Goods Transport Agency) service tax from the appellant-assessee's factory to its Units by way of stock transfer, is concerned, it is found that the order-in-original is unsustainable, insofar as it rejects the assessee's claim for ITC, inasmuch as it is contrary to the decision of the Division Bench of this Court in the assessee's own case - credit allowed. ITC on outward transfer for removal of goods from the appellant's factory to the customer premises - HELD THAT - It is submitted that the above judgment of the Division Bench of this Court may have a bearing. The relevance of the above said Division Bench judgment insofar as the claim of ITC on GTA also needs to be considered, which the respondent failed to examine, thereby resulting in non-application of mind to relevant factors it appears appropriate that the appellant-assessee's claim of CENVAT credit in respect of the GTA service both in respect of stock transfer as well as upto the customer's premises, may have to be re-examined keeping in mind the above said judgment of the Division Bench of this Court in M/S. ALKRAFT THERMOTECHNOLOGIES - matter on remand. Non-compliance with the request of personal hearing - HELD THAT - There seems to be some merit in the submission of the learned counsel for the appellant-Company (writ petitioner-assessee) that their request for personal hearing was not dealt with appropriately, from a perusal of the order dated 08.01.2019 passed by the respondent - the order of the respondent, dated 08.01.2019, warrants interference by this Court. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Challenge to order denying Input Tax Credit (ITC) on stock transfer basis and service tax on outward transport.
2. Allegation of violation of principles of natural justice in rejecting personal hearing.
3. Interference with the order dismissing the Writ Petition on the ground of alternative remedy.

Analysis:
1. Challenge to denial of ITC:
The appellant contested the order denying ITC on stock transfer and service tax on outward transport, arguing that it contradicts a Division Bench decision in their favor. The Court noted the precedent where the Division Bench allowed CENVAT Credit for service tax on transport from Chennai to Jamshedpur. Consequently, the order-in-original denying ITC in the present case was deemed unsustainable due to inconsistency with the Division Bench ruling.

2. Allegation of violation of natural justice:
The appellant claimed a violation of natural justice as their request for a personal hearing was not granted. The Court acknowledged the merit in this argument, highlighting the inadequacy in dealing with the appellant's request for a personal hearing. This non-compliance with the principles of natural justice led the Court to set aside the order of the respondent, emphasizing the importance of due process.

3. Interference with dismissal based on alternative remedy:
The respondent contended that the order dismissing the Writ Petition due to the availability of an alternative remedy did not warrant interference. However, after hearing both sides and examining the records, the Court disagreed with this stance. The Court found grounds to interfere with the order, emphasizing the need to re-examine the appellant's claims in light of relevant judgments and granting the appellant the opportunity to submit objections and necessary documents for reconsideration.

In conclusion, the Court set aside the order, allowing the appellant to present objections and documents within a specified period. The respondent-authority was directed to consider the matter based on the relevant judgments and pass appropriate orders within a stipulated timeframe. The Writ Appeal was disposed of accordingly, with no costs imposed, and the Civil Miscellaneous Petition was closed.