Custom, Excise & Service Tax Tribunal
Axiom Cordages Ltd vs Cce Thane Ii on 29 November, 2017
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
E/86587/16
(Arising out Order-in- Appeal No. SK/121/TH-II/2016 dated 15.03.2016 passed by the Commissioner of Central Excise(A), Mumbai I)
For approval and signature:
Honble Shri Raju, Member (Technical)
1. Whether Press Reporters may be allowed to see No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Seen
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
Axiom Cordages Ltd.
Appellant
Vs.
CCE Thane II
Respondent
Appearance:
Shri Rajesh Ostwal, Advocate for the appellant Shri Manoj Kumar, DC (AR) for the respondent CORAM:
Honble Shri Raju, Member (Technical) Date of hearing : 17.11.2017 Date of decision : 29.11.17 O R D E R No: ..
Per: Raju This appeal is filed by Axiom Cordages Ltd. The appellant has two units which are located adjacent to each other. One is a DTA and other is EOU. In respect of certain services, the entire credit was availed by DTA though part of the service was used by EOU unit as well. Demand show-cause notice was issued alleging that DTA unit cannot avail entire credit of the service as part of service was used in EOU and they were not registered ISD (Input Service Distributor).
2. Ld. Counsel for the appellants argued that a separate proceeding demanding reversal of amount on the value of Hawser net cleared by them without payment of duty is pending in Tribunal. In the said proceeding, the appellants have reversed part of the credit. The present demand relates to the same credit. He further argued that certain legal arguments which were not taken before the lower authorities are taken up before the Tribunal. He argued that like prior to April 2012 it was possible for the appellants, if registered as ISD, to transfer the entire credit to one unit. He argued that simply because they were not registered as ISD the credit should not be denied. He further argued that the entire credit was available to them if the two units DTA and EOU are taken together.
3. Ld. AR relies on the impugned order.
4. It is seen that the appellants have not disputed that the service for which the entire credit was taken in DTA were used in respect of both DTA and EOU unit. In respect of multiple units facility in the ISD was created by revenue. In the said facility it was possible for a person to avail the credit of service use at multiple location in a separate entity called ISD. It was possible for said entity to distribute the credit among units. Till April 2012 there was no restriction the manner in which credit was to be distributed. The appellants have claimed that merely because they were not registered as ISD the credit should not be denied as that was a procedural formality. This is a new argument taken before the Tribunal and same was not taken before the Commissioner (Appeals).
5. Further it is seen that the appellants have reversed part of the amount in the proceedings which culminated in the Order-in-Original no. 39/AC/COMMR/TH-II/2014d dated 31.10.2014 where a demand of an amount was made under Rule 6(3)(i) of the Cenvat Credit Rules. The appellants have contended that they have reversed proportionate credit in terms of Rule 6(3)(ii) of the Cenvat Credit Rules. It has been argued that the amount reversed in the said proceedings is the same amount on which the demand has been raised in this proceedings.
6. I find that the issue regarding non-registration as ISD being a procedural issue was not raised before the Commissioner (Appeals) and therefore there are no findings in the impugned order. The issue is significant since in many decisions superior courts have held that mere procedural formality should not come in the way of substantial benefit. If the registration as ISD was a procedural formality or otherwise need to be decided.
7. In view of above, the impugned order is set aside and the matter remanded to the Commissioner (Appeals) to decide the issue afresh after considering the new argument raised by the appellants. The appeal is allowed by way of remand.
(Pronounced in Court on ..............................) (Raju) Member (Technical) //SR
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E/86587/16