Gujarat High Court
Commissioner vs Mundra on 5 May, 2010
Gujarat High Court Case Information System
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TAXAP/737/2009 1/ 9 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 737 of 2009
With
CIVIL
APPLICATION No. 238 of 2009
In
TAX
APPEAL No. 737 of 2009
=========================================================
COMMISSIONER
- CENTRAL EXCISE & CUSTOMS - Appellant(s)
Versus
MUNDRA
PORT & SPECIAL ECONOMIC ZONE LIMITED - Opponent(s)
=========================================================
Appearance :
MR
KALPESH N SHASTRI for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 05/05/2010
ORAL
ORDER
(Per : HONOURABLE MS.JUSTICE H.N.DEVANI)
1. Appellant-Revenue has challenged order dated 30.9.2008 made by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) proposing the following three questions:
(i)Whether Honourable CESTAT has committed error in interpreting the provisions of Cenvat Credit Rules while holding that the Assessee is entitled for cenvat credit of service tax paid on various services, namely, (i) mobile phones (ii) CHA services (iii) Rent-a-Cab service (iv)Surveyor charges (v) other input services (such as profession fees, construction, soil testing, labour charges etc.,) and (vi) duty paid on Air Conditioners ?
(ii) Whether Honourable CESTAT has committed an error in ignoring Circular No. B-4/7/2000-TRU dated 3.4.2000, stipulating that the goods used in the office premises are not eligible for cenvat credit?
(iii) Whether the respondent is liable for penalty under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 78, 76 and 77 of the Finance Act, 1994?
2. The respondent provides port services, storage and warehousing services and cargo handling services and holds service tax registration under section 69 of Chapter V of the Finance Act, 1994 (the Act). During the course of scrutiny of the records, it was found that the respondent had availed and utilised the CENVAT credit of duty of excise paid on steel, cement, air-conditioners, club fees, CHA services, rent-a-cab, mobile phone/telephone, surveyor services, other inputs and other input services. According to the revenue, CENVAT credit availed of by the respondent in relation to cement and steel, air-conditioners, club fees, services provided to importers by Customs House Agents, rent-a-cab operators, mobile phones etc. was not admissible, hence, show cause notice came to be issued to the respondent to show cause as to why the wrongly availed credit should not be disallowed and recovered under rule 14 of the Cenvat Credit Rules, 2004 (the Rules) read with section 68 and 73 of the Act with consequential penal action under the relevant provisions of the Act and the Rules. The adjudicating authority confirmed the duty of demand to the tune of Rs.12.79,33,722/- along with interest and penalty of identical amount in terms of Rule 15 of the Rules, read with section 78 of the Act and under section 76 and 77 of the Act.
3. The respondent carried the matter in appeal before the Tribunal. Vide the impugned order, the Tribunal confirmed the demand in relation to cement and steel as well as service tax paid on club house fees, whereas insofar as the demand in relation to input credit in respect of service tax paid on mobile phones, CHA and surveyor charges, rent-a-cab, club house fees and professional charges paid to consultants for construction, soil testing and labour, as well as credit of duty paid on the air-conditioners etc., was concerned, it was held that CENVAT credit of duty paid in respect thereof was admissible.
4. Learned Standing Counsel for the appellant-revenue has emphatically referred to the averments made in the memo of appeal. Reliance is placed upon the decision of the Apex Court in the case of C.K. Gangadharan Vs. CIT, 2008(228) E.L.T. 497 (S.C.) to submit that even if the earlier order in relation to the same controversy has not been challenged by the revenue, it is open for the revenue to challenge the same subsequently.
5. As can be seen from the impugned order of the Tribunal, the Tribunal has noted that Commissioner (Appeals), vide Order-in-Appeal No. 346/2007/Commr(A)/RAJ dated 30.11.2007 has allowed the credit of service tax paid on mobile phones, rent-a-cab, CHA and surveyor charges and professionals and that the said order has not been challenged by revenue and as such has attained finality. The Tribunal has, accordingly, held that credit in respect of service tax paid on the aforesaid was available to the respondent. Since, the controversy as regards admissibility of CENVAT credit in relation to mobile phones, rent-a-cab, CHA and surveyor charges and professionals in respect of the respondent had already been subject matter of challenge in relation to another period and had been held in favour of the respondent by Commissioner (Appeals), which decision has not been carried further by the assessee, the Tribunal was justified in relying upon the same and deciding in favour of the respondent. It is settled legal position as held by the Apex Court in the case of Radhasoami Satsang Vs. CIT (1992) 193 ITR 321 (SC) (though in the context of the Income-tax Act), that strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and the parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.
The principle enunciated by the aforesaid decision would be squarely applicable to the facts of the present case inasmuch as in the case of the respondent itself, Commissioner (Appeals) has held that it is entitled to credit of the service tax paid by it on mobile phones, rent a cab, CHA and Surveyor charges and professionals. Hence, in absence of any material change justifying the revenue to take a different view of the matter, the question could not have been reopened and a different and contradictory stand could not have been taken. In the circumstances, no infirmity can be found in the impugned order of the Tribunal in relation to admissibility of CENVAT credit in relation to mobile phones, rent-a-cab, CHA and surveyor charges and professionals.
6. Insofar as the demand relates to the credit of duty on air-conditioners, the Tribunal upon appreciation of the evidence on record has found as a matter of fact that the assessee is entitled to credit of duty paid on air-conditioners. Learned Counsel for the appellant is not in a position to point out any infirmity in the findings of fact recorded by the Tribunal. In the circumstances, the conclusion arrived at by the Tribunal being based upon a finding of fact, in absence of any challenge to the said finding of fact on the ground of perversity, the same does not give any rise to any question of law.
7. Insofar as the principle laid down by the Apex Court in case of C.K. Gangadharan (supra) is concerned, there can be no dispute as regards the general proposition of law enunciated by the Apex Court. However, the Apex Court has not laid down that in case of the same assessee, if identical transaction for earlier period has not been taxed either at the original stage or after being assessed to tax has been held to be not taxable in appeal proceedings, it would be open to revenue to re-agitate the same issue without either challenging the earlier order of the appellate authority or pointing out any difference in facts and circumstances of the case or position in law having undergone change. This salutary principle is not based on the principle of res judicata but is founded on principle of judicial comity and consistency in adopting approach to a particular issue in case of the same assessee, revenue being a party in the proceedings both relatable to the earlier period and the subsequent period. In such circumstances, revenue cannot be permitted to place reliance on the aforesaid principle laid down by the Apex Court in the case of C.K. Gangadharan (supra) by stating that the assessee has to show malafide. It is not a case of any allegation of mala fide, but as noted, a question of judicial discipline of comity between the same parties in the facts and circumstances of the case and the provisions of law remaining consistent.
8. In light of the aforesaid, the impugned order of the Tribunal does not suffer from any legal infirmity so as to warrant interference. No question of law much less any substantial question of law can be stated to arise out of the impugned order of the Tribunal.
9. The appeal is, accordingly, dismissed.
CIVIL APPLICATION No. 238 of 2009 As the main Appeal is dismissed this application does not survive and is disposed of accordingly.
Sd/-
Sd/-
(D.A.
Mehta, J.) (H.N. Devani, J.)
M.M.BHATT
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