Custom, Excise & Service Tax Tribunal
M/S. Ve Commercial Vehicles Ltd vs Cce, Indore on 19 January, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
COURT-III
Excise Stay Application No.E/S/52461 - 52462/2014 in
Excise Appeal No.E/51968-51969/2014-EX[DB]
[Arising out of Order-in-Original No. 03-04/Commr./CEX/IND/2014 dated 08.01.2014 passed by the Commissioner of Central Excise, Indore].
For approval and signature:
HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
1. Whether Press reporters may be allowed to see 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
CESTAT (Procedure) Rules, 1982 for publication in
any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
authorities?
__________________________________________________
M/s. VE Commercial Vehicles Ltd. Appellant
Vs.
CCE, Indore Respondent
Present for the Appellant : Shri.B.L.Narasimhan, Advocate
Shri A.C.Jain, Advocate
Present for the Respondent: Shri.Pramod Kumar, JCDR
Coram:HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)
HONBLE MR.S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing/Decision: 19/01/2015
FINAL ORDER NO. 50390-50391/2015
PER: RAKESH KUMAR
The facts leading to filing of these appeals and stay applications are, in brief, as under:-
1.1 The appellant are manufacturers of chassis of light commercial vehicle as well as light commercial vehicles chargeable to central excise duty. The period of dispute in this case is from October, 2011 to June, 2012 and July, 2012 to December, 2012. The appellant were availing of cenvat credit in respect of the Central Excise duty paid on inputs, input services and capital goods as per provisions for Cenvat Credit Rules, 2004. The dispute in this case is in respect of cenvat credit in respect of certain services. According to the department, the appellant were not eligible for cenvat credit in respect of consultancy services received from foreign service provides, business support service, various services distributed from head office under ISD invoices, repair and maintenance service, business auxiliary service, business promotion service, errection and installation and commissioning service, banking and commercial service courier service, telephone service, tours and travel services, advertisement agency services, custom house agent service, commercial training & coaching service, event management service, market research services, commercial or industrial construction service, architect service, interior decorators service, security service, mandap keeper service, real estate Agents service, photography service, transport and cost accounting service received from various domestic service provider. The total service tax sought to be denied by issue of two show cause notice is Rs.23,68,01,071/-. Both the show cause notices were adjudicated by the Commissioner vide Order-in-Original No. 03-04/Commr./CEX/IND/2014 dated 08.01.2014, by which the Commissioner denied the cenvat credit in respect of the services mentioned above and confirmed the above mentioned cenvat credit demand alongwith interest thereon under section 11AB and while imposing penalty of Rs.3.5 Crore on the appellant company under Rule 5 (1) of Cenvat Credit Rules, 2004, has imposed penalty of Rs.55.00 Lakhs on Shri Nitin Nagda, GM (Finance) of the appellant company under Rule 26 of the Central Excise Rules, 2002. Against this order of the Commissioner, these two appeals have been filed alongwith stay applications.
2. Though today this matter is listed for hearing of the stay petition, after hearing the matter for sometime, the Bench was of the view that these appeals can be taken up for final disposal as, prima-facie, the order passed by the Commissioner appears to be non-speaking order. Accordingly, the requirement of pre-deposit is waived and with the consent of both the sides the matters are heard for final disposal.
3. Shri B.L. Narasimhan, Advocate, the ld. Counsel for the appellant pleaded that though the cenvat credit totalling to Rs.23.68 Crores has been denied in respect of total of 21 different input services including consultancy service received from foreign service providers, the Commissioner has discussed the denial of only the cenvat credit of Rs.5,54,49,137/- in respect of consultancy service received from foreign service provider and he has not discussed at all the grounds for denial of the cenvat credit in respect of other services, that even in respect of consultancy service received from foreign service providers, the show cause notice has sought denial of the credit on the ground that the service tax has been paid on this service by the appellant as service recipient under Section 66 A of Finance Act, 1994 while in terms of the provisions of Cenvat Credit Rules, the cenvat credit of the service tax paid under Section 66 A is not permissible, that the Commissioner going beyond the allegation in the SCN, has denied the cenvat credit on the ground that the consultancy service received from foreign service providers is not covered by the definition of input service, that in respect of the other services, the cenvat credit has been denied by holding that the services received are not covered by the definition of input service but there is absolutely no discussion in the impugned order in this regard, that in para 22 of the impugned order the Commissioner refers to the Boards Circular No.943/4 /2011 dated 29.04.2011 cited by the counsel for the appellant, but he does not discuss the same on the ground that he has not found the circular on the CBECs Website, that in terms of this circular of the board, all the services, in dispute, would be covered by the definition of input service and that the impugned order therefore, being a non-speaking order and having been passed by going beyond the scope of show cause notice is not correct.
4. Shri Pramod Kumar, the ld. JCDR agrees that the order passed by the Commissioner is a non-speaking order, as it does not discuss at all the appellants submission that the various services received by them would be covered by the definition of input service in view of the Boards circular No. 943/4/2011 dated 29.04.2011.
5. We have considered the submissions from both the sides and perused the records. The cenvat credit of Rs.5,54,49,137/- was sought to be denied by the show cause notice in respect of consultancy services received from foreign service providers on the ground that the appellant as the service recipient had paid service tax on these services under section 66 A of the Finance Act 1994, while the Cenvat Credit Rules, 2004 do not permit the cenvat credit of service tax paid by a service recipient under section 66 A. Though the Commissioner in para 24 of the order relying upon the Boards Circular No.354/148/09 dated 16/7/09 has given a finding that the cenvat credit rules would be admissible to the appellant even though they had paid the service tax on this services received from foreign service provider as service recipient under section 66A, they would not be eligible for cenvat credit as the service received is not covered by the definition of input service but he has not discussed at all as to how the consultancy services received from foreign service providers are not covered by the definition of input service. In respect of the other services received by the appellant from various domestic service providers he has not discussed at all the Boards Circular No.943/4/2011 cited by the Counsel for the appellant on the ground that he could not locate the circular on CBEC Website. He has not even discussed the question of admissibility of cenvat credit in respect of these services on merit. While a responsible Adjudicating Officer while deciding an issue is expected not to blindly rely upon Boards Circular, he is expected to examine the issue independently on merits. We have no hesitation in observing that the order passed by the Commissioner is an irresponsible order which is not expected from a senior officer of the rank of Commissioner. The impugned order is set aside. The matter is remanded to the Commissioner for de-novo adjudication. The appeals as well as stay applications stand disposed of as above. The registry is directed to endorse a copy of this order to the Chairman, CBEC for his information.
[Dictated & Pronounced in the open Court].
(S.K.MOHANTY) (RAKESH KUMAR) MEMBER (JUDICIAL) MEMBER (TECHNICAL) Anita ?? ?? ?? ?? 0 7